Malaysia: Dayang Enterprise Charters Six PPB’s Vessels

The Board of Directors of PPB announced on Thursday that the Company has accepted a letter of award from Dayang Enterprise Sdn Bhd (DESB), a wholly-owned subsidiary of Dayang Enterprise Holdings Berhad, for the supply of five workbarges and one workboat for the duration of five years with option of extension of one year, commencing in various stages starting from July 2013.

The Vessels Charter relates to the contract for the provision of hook-up, commissioning and topside maintenance services awarded by Sarawak Shell Berhad/Sabah Shell Petroleum Company Limited to DESB. The estimated contract value for the Vessels Charter is estimated at approximately RM705 million.

The principal activities of the PPB Group are the provision of marine support services for the oil and gas industry and the chartering of offshore support vessels (OSV). As Dayang Enterprise is a major shareholder of the Company, the Vessels Charter is deemed a recurrent related party transaction (RRPT).

The above RRPT will be carried out on arm’s length basis and on normal commercial terms which are not more favourable to the related party.

The PPB Group’s OSV operations complement those of Dayang Enterprise, whose mainstay is in the hook-up, commissioning and topside maintenance services. The PPB Group’s strategy is to target a higher proportion of long term charters as opposed to short-term charters (less than 12 months) which then serves to provide earnings stability to the Group. The acceptance of the letter of award from DESB will enable the PPB Group to realise the strategy that it has laid out.

[mappress]

PPB, May 27, 2013