MMA Offshore Sells its Batam Shipyard
Australian company MMA Offshore has agreed to sell its shipyard facility in Batam, Indonesia, to Wasco Engineering Group for a total of $15 million.
The offshore support vessel operator and services provider announced it has entered into an agreement with Wasco for the sale of the shipyard, with the deal expected to be concluded by the end of the year. The facility will remain sub-leased to Wasco until payment is complete. MMA will keep a portion of the shipyard for its own purposes and will have access to the wharf for a period of five years.
Wasco, a subsidiary of Malaysian company Wah Seong Corporation Berhad, plans to use the acquisition of the Batam shipyard to expand its fabrication facilities and take on larger projects on the international market.
“The sale of the Batam shipyard is an excellent outcome for the company and in line with our strategy to divest non-core assets. The consideration of $15 million will materially reduce our net debt position, deleveraging our balance sheet and positioning the company well to take advantage of growth opportunities in an improving market,” said David Ross, MMA Managing Director.
MMA acquired the Batam shipyard in 2014. The facility is known for customized offshore support vessels, and has delivered over 30 over the course of the past two decades. However, a significant decline in offshore newbuild activity has seen the fortunes of the shipyard sour, leading MMA to seek a sale.
The proceeds from the shipyard sale is expected to ease the pressure on MMA’s books, and the company hopes to further reduce its debts by selling off some of its fleet. The firm says that negotiations for the sale of four vessels are at an advanced stage, and it has received inquiries about three others.