TTA acquires Subsea Stake in the ME through Subsidiary and sells One Utility Vessel to Increase Investors' Returns
(Bangkok, 17 March 2010) -- Focusing on its long-term business objectives, Thoresen Thai Agencies Plc and its subsidiaries are implementing strategic moves to remain competitive in the global marketplace, grow the group business, and maximize investors' returns.
M.L. Chandchutha Chandratat, President and Chief Executive Officer of TTA, revealed that Mermaid Maritime Public Company Limited ("Mermaid"), a key TTA subsidiary, just acquired Subtech Ltd. through its wholly owned subsidiary, Mermaid Offshore Services Ltd. ("MOS").
Qatari-based Subtech is a professional provider of diving services for offshore and sub-sea civil engineering in the Middle East and the Persian Gulf. "Subtech has a very good track record in the Middle East with a good group of professionals and should significantly enhance the business potential of the MOS fleet there, which should result in improved profitability."
He said the Greater Diversity and Balance strategy remains TTA"s driving force and should lead to further acquisitions and diversification in the three main business groups of Transport, Energy, and Infrastructure. The acquisition of Subtech is one key strategic move to expand Mermaid's business, which will help diversify and balance TTA's overall business growth.
"The acquisition cost of USD 7.5 million should deliver good shareholder returns, as it allows MOS to expand its provision of turnkey sub-sea engineering services into the bustling Middle East region. The acquisition will be fully funded internally from Mermaid's recent rights issue in 2009," said President & CEO Chandchutha.
Incorporated in Seychelles, Subtech Ltd. has a 97% principal investment in Subtech Qatar Diving and Marine Services LLC ("Subtech Qatar"). Subtech Qatar is an IMCA member diving and sub-sea contractor incorporated in Qatar, servicing mainly the Middle East and Persian Gulf region.
"MOS entered into an alliance agreement with Subtech Qatar in 2008 for the provision of dive support vessels ("DSV") in the Middle East and Persian Gulf region. Subtech Qatar wanted to augment its capabilities and gain access to vessel assets and MOS had decided to expand geographically to increase its market share for DSV's. The co-operation under the alliance agreement has been fruitful to date, leading to the acquisition," said President & CEO Chandchutha.
Following the acquisition, MOS plans to develop Subtech Qatar into a local contractor capable of providing quality turnkey sub-sea engineering services to local and international clients within the region and to expand MOS market presence in the region through mobilizing additional vessels and remotely operated vehicles ("ROVs") as opportunities arises.
President & CEO Chandchutha believed that being a local contractor will give MOS a natural advantage due to local knowledge, convenient base-support, and lower cost of mobilization. "Offshore oil and gas activity in the Middle East and Persian Gulf region is set to increase as offshore fields begin to contribute a greater share of future production and reserves in the region," said M.L Chandchutha.
"The MOS acquisition of Subtech therefore represents a geographical expansion that is logical in the face of growing business opportunities in that region. We are also pleased to have retained the existing Subtech management team which will allow us to get off the ground fairly quickly."
In addition, as part of Mermaid's ongoing fleet renewal and upgrade program, President & CEO Chandchutha also announced the sale of one of its older vessels named "Mermaid Responder" to Dulam International Ltd. for USD 2.5 million with delivery on 12 March 2010.
The MOS fleet continues to expand, as "Mermaid Asiana" was delivered in January 2010 and presently undergoing final integration and commissioning of its dive system, while the "Mermaid Endurer" is scheduled for delivery, with dive system completed, in the third financial quarter of 2010.
Mermaid also announced the award of a three-year Chevron contract for call-out sub-sea services in Thailand, with services for the first year to include utilization of these two remaining utility vessels.
Thoresen Thai Agencies plc (TTA) is amongst the top 50 companies listed on the Stock Exchange of Thailand. Its investment strategy is to grow through a diversified business portfolio of transport, energy, and infrastructure assets, both domestically and internationally. TTA is recognised as a leader in the dry bulk shipping industry. The company has also expanded its investment into other business areas, such as offshore services through Mermaid Maritime Public Company Limited, fertilizers and logistics through Baconco Co., Ltd., and coal-related businesses through Merton Group (Cyprus) Limited and Unique Mining Services Public Company Limited.
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