Date:28/11/2009 URL: http://www.thehindubusinessline.com/2009/11/28/stories/2009112851150500.htm

Back Sembawang, Kakinada Seaports to form venture, invest $375 m

Will establish, operate marine and offshore facility.

Our Bureau

New Delhi, Nov 27

Sembawang Shipyard, a wholly-owned subsidiary of the Singapore-based Sembcorp Marine, and Kakinada Seaports, announced on Thursday that they will sign an agreement to form a joint venture company, Sembmarine Kakinada Ltd (SKL).

The joint venture company, to be created with an investment of about $375 million over 3-5 years, will establish and operate a marine and offshore facility to cater to the offshore units and merchant vessels trading or operating in Indian waters.

Sembawang Shipyard will have a 19.9 per cent share in the joint venture to start with, with an option to increase it to 40 per cent over the next few years.

Debt-equity ratio

The exact equity and debt components will be finalised in the next three months. Mr Ong Poh Kwee, Deputy President of Sembcorp Marine and Managing Director of Sembawang Shipyard, said, “We are considering various options for debt:equity – we may go for 30:70 or 50:50.”

The newly established facility is poised to become a one-stop integrated offshore service facility catering to offshore vessels and merchant ships including the new buildings, conversions, repairs and servicing of offshore vessels and ships, building of offshore modules, equipment..

Three phases

During Phase-I (2010-mid 2011), SKL will provide riser/equipment repairs, afloat repairs and module fabrication.

In Phase-II (from early 2011-2013), the shipyard will provide full dry-docking and repairs services, afloat repairs, building of new ships/rigs, riser / equipment repairs and module fabrication. In Phase-III (from 2014), the shipyard will provide additional facilities with the further expansion of the workshops and the docking facilities.

SKL will sign “favoured customer contracts” to provide attractive rates with Transocean Offshore International Ventures, India, to support its ongoing offshore drilling units. SKL will also sign a similar contracts with Aban Offshore.