Mainboard-listed Nam Cheong is selling a 4,000 deadweight tonnage platform supply vessel (PSV) for US$20.5 (26.3) million. The vessel is scheduled to be delivered to the buyer, a Vietnam-based offshore and marine business, by the end of this year and will contribute positively to Nam Cheong’s bottomline.
Depending on available opportunities, Nam Cheong will channel the transaction’s net proceeds to its shipbuilding business, either for external sales or fleet expansion purposes to grow recurring income base.
The Sarawak-based company adds that the deal is part of its fleet renewal efforts as it seeks to divest relatively ageing vessels at “opportune time and pricing” so as to recycle capital efficiently for its shipbuilding segment.
Nam Cheong CEO Leong Seng Keat says, “Our strong OSV [offshore support vessel] shipbuilding heritage and established global clientele base allow us to identify and capitalise on market opportunities for vessel monetisation. This enables the Group to capture earnings upsides through the sale of the existing aged vessel[s].”
Globally, aging OSV fleets face costly upgrades. Major OSV owners are operating fleets around 14 to 15 years-old while the average of OSVs is around 16.5 years in southeast Asia. In contrast, Nam Cheong’s OSV fleet, with an average age of around eight years and presumably equipped with newer safety and efficiency features, is poised to support the region’s offshore and marine activity.
Earlier this month, The Edge Malaysia reported that Sarawak’s state-owned Petroleum Sarawak Berhad (Petros) and Malaysia’s national oil company Petronas, are on the verge of finalising an agreement to develop the state’s gas resources. Having earned a RM1.22 billion chartering contract from Petronas in November 2024, DBS Group Research suggests that Nam Cheong is well-positioned to seize opportunities arising from renewed appetite for offshore assets should the deal be concluded.
Shares in Nam Cheong opened at 86 cents on Dec 24, an increase of 1.5 cent or 1.8% from the previous day.
