Nam Cheong sells four vessels for $90 M

Nam Cheong Limited, Malaysia’s Offshore Support Vessel builder, has announced that it has sold four vessels worth approximately US$90 million (approximately S$112.1 million).

Leong Seng Keat, Nam Cheong’s Chief Executive Officer said: “We are pleased to see that the strong momentum has continued, with these wins closely following the sale of six vessels in June and July. This is a clear demonstration of the market’s confidence in our capabilities as an OSV builder. With buoyant prospects in the OSV sector driven by rising rig count and strong utilisation rates, we see a preference for younger and more sophisticated vessels to support modern rigs, leading to increased requirements for larger AHTS. With the securing of these four sales contracts, this has boosted Nam Cheong’s order book to a total of 29 vessels worth approximately RM2.0 billion.”

One Platform Support Vessel (“PSV”) of 5,000 dead weight tonne equipped with Dynamic Positioning System 2 (“DP2”) was sold to a subsidiary of a repeat customer, Bumi Armada Berhad, a Malaysia-based international offshore oilfield services provider. The customer had previously purchased four Multi-Purpose Platform Support Vessels in February 2013 which represented one of Nam Cheong’s largest collective wins.

The sale of a 200-men Accommodation Work Vessel (“AWV”), also equipped with a DP2 System, was made to a joint venture company of the Group, co-owned with Main Board SGX-listed, Marco Polo Marine Ltd which is an integrated marine logistic group with an established track record in the chartering of OSVs in the region.

In addition, the Group secured a sales order for a 6,000 bhp Anchor Handling Towing Supply (“AHTS”) vessel from a new customer based in Vietnam, an emerging player with a strong reputation in the ship agency services and service broking business.

Separately, a repeat customer based in Malaysia, Time Marine Services Sdn Bhd, with focus on marine vessel services, drilling services and special services also purchased a 5,000 bhp AHTS.

Leong concluded: “Going forward, we strive to continue delivering on our good track record and to capitalise on opportunities such as strategic partnerships. Our recent joint venture with Marco Polo is one such example where we foresee a mutually beneficial relationship leveraging on their deep expertise in the vessel chartering space while relying on our key competency in building high quality vessels. In doing so, we aim to further deepen our roots in the OSV industry and strengthen our ties with a key partner like Marco Polo.”

The four vessels are all of American Bureau of Shipping (ABS) class and are being constructed as part of Nam Cheong’s built-to-stock series in the Group’s subcontracted yards in China. They are scheduled for delivery in 2014 and are expected to contribute positively to the Group’s earnings for the financial year ending 31 December 2014.