According to a Nov 25 bourse filing by Seatrium, this partnership will tap CSL's "extensive experience" in ship-building, and also Seatrium's technical expertise and design capabilities.
In its Nov 25 note, DBS points out that utilisation for jackup rigs has hovered above 90% over the past year. This tight market supply is often a precursor for rising new building demand.
Furthermore, rigs in operation are relatively aged, given the lack of new rigs built over the past decade of downturn, and thus in need of rejuvenation.
"The partnership with the Indian shipyard is timely, which we believe will increase utilisation and income stream for Seatrium’s US facilities," says DBS.
"We continue to like Seatrium for its earnings turnaround and market leadership to ride the robust demand for O&G and renewable facilities," adds DBS.
Seatrium shares closed at $1.93, up 1.05% for the day.
