Rig builder Sembmarine taking full control of PPL Shipyard
- Business & Finance
Singapore’s offshore rig builder Sembcorp Marine, also known as Sembmarine, is taking full control of its subsidiary PPL Shipyard (PPLS).
The company has reached a deal with PPL Holdings Pte Ltd (“PPLH”) and E-Interface Holdings Limited (“EIHL”) to acquire the remaining 15% in the shipyard for $115 million.
PPL Shipyard is in the business of designing, constructing, repairing and improving of oil rigs, ships and other ocean-going vessels. Following the acquisition, it becomes a wholly-owned subsidiary of the Sembcorp Marine.
Providing rationale for the transaction, Sembmarine said the move would enable it to optimally manage the businesses, finance and resources of PPLS, and fully align the latter’s corporate strategies to the company to generate sustainable returns.
To remind, Sembcorp Marine made an initial 50% investment in PPLS back in 2001. In 2003, the company increased its stake in PPLS to 85% and also agreed on the terms for the sale by PPLH and EIHL of their balance 15% shares in PPLS.
“Over the years, the investment in PPLS has helped propel the Company to be a global player in the design and construction of jackup and semi-submersible rigs. Since 2001 until 2015, PPLS has made cumulative profits of over S$1.6 billion. Cumulative cash dividends for the same period received by the Company from PPLS amounted to approximately S$540 million. The total purchase consideration for the Company’s 100% investment in PPLS (including this Acquisition consideration) is approximately S$186 million,” Sembcorp Marine said in a statement on Tuesday.