Local yards may be STX OSV suitors
Sembcorp Marine and Keppel Corporation may be in the running to pick up a majority 50.75 per cent share of Norwegian shipbuilder STX OSV.
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Analysts see good fit for Sembmarine, Keppel Corp
By LYNN KAN
17 January 2012
Sembcorp Marine and Keppel Corporation may be in the running to pick up a majority 50.75 per cent share of Norwegian shipbuilder STX OSV.
‘We are doing some review on this,’ a source with knowledge about Sembmarine’s interest told Reuters.
STX OSV’s indebted parent company, STX Corporation, has sent out memoranda on the sale to 18 potential - but unidentified - investors.
The news sent STX OSV’s stock 6.9 per cent or nine cents up to end trading at $1.39 yesterday.
Both Sembmarine and Keppel declined to comment about their interest in South Korea-based STX Corp’s stake, which is valued at US$603 million.
Neither would they confirm if STX Corp sent them memoranda.
Analysts BT spoke to thought a stake in STX OSV would be attractive to rigbuilders Sembmarine and Keppel.
However, benefits to STX OSV are not as clear-cut.
Said Kay Lim, regional head analyst of DNB: ‘It would be attractive if the Singapore yards can get synergies and therefore higher returns out of the acquisition.’
AmFraser analyst Lee Yue Jer said that STX OSV’s business in building offshore support vessels would bring diversification to the rigbuilders.
‘It’s not just rigs that are set to boom, but OSVs as well. At the moment, the utilisation rates for the type of large OSVs that STX OSV builds are fairly high,’ said Mr. Lee.
Mr. Lim thought that STX OSV would be a better fit in Keppel’s organisation rather than Sembmarine.
‘It’ll fit Keppel more because of Keppel’s ‘near market near customer’ strategy. STX OSV’s North Sea-specification vessels and its shipyards in Romania and Norway makes more sense for Keppel,’ he said, adding that Keppel also has an offshore support vessels arm in Keppel SingMarine.
Sembmarine, while it has the capital to buy into STX OSV, may find it difficult to spare human resources to integrate it into the company’s structure, said Mr. Lim.
‘Sembmarine is tied up with capital expenditure in Tuas and Brazil. To integrate STX OSV, it would have to put in a lot of its own resources. And right now, its hands are tied on that,’ he explained.
Mr. Lee, however, felt that STX OSV’s Brazilian yard makes it compelling for Sembmarine to consider taking a share in the company. ‘Sembmarine could have more to gain (than Keppel, which already has a presence in Brazil),’ he said.
Benefits to STX OSV of a Singapore rigbuilder owner are not as clear-cut.
Mr. Lee said: ‘In the near-term, it would be business as usual for STX OSV. But down another year or so, if it becomes a subsidiary of Keppel or Sembmarine, which are world renown leaders in rigbuilding, it could leverage off the relationship. The rigbuilders could start to offer OSVs as part of a package.’