SembCorp Marine's Strategic Investment In Saudi Arabia

UAE, Nov 27, 2007

SembCorp Marine Ltd (“SCM”) and Nasser Mohammed Al-Mukairish and Partners Company (Al Mukairish) have signed a joint venture agreement to form SembMarine (Middle East) Pte Ltd (“SMME”).SMME will be a Founding Shareholder in the Saudi Arabia joint stock company named Floating Dock for Shipbuilding and Ship Repair Company (""FDSCO""), which will build, own and operate the FDSCO Yard during its 30-year term.

SCM will invest US$6.6 million in cash in SMME through subscription for 60 percent of SMME, and subscribing to 6.6 million fully paid equity shares in SMME at US$1 each. Al Mukairish will subscribe the balance 40 percentage through a US$4.4 million investment.

SMME will keep US$1 million as working capital and will invest US$10 million into FDSCO for a 2.5 percent equity stake. In addition, SCM and Al Mukairish may provide

SMME with shareholders’ advances of between US$10 million to US$30 million at a later stage to acquire an additional 2.5 percent to 7.5 percent equity stake in FDSCO over and above the initial 2.5 percent stake. SCM also has an option to acquire up to 80 percent shareholding of SMME within a 3-year period from the date of incorporation.

The 21 hectares FDSCO Yard will be constructed on the Al Jazeera Island which is a part of the Yanbu Commercial Port, facing the Red Sea. It is strategically located, convenient and suitable for ship repair, especially ships plying the Red Sea- Mediterranean Sea via the Suez Canal. The FDSCO Yard will offer a wide range of shipbuilding, ship repairing, marine engineering facilities and services to the regional heavy industry.

Fully operational by 2009, the FDSCO Yard will have a shiplift system for new building and repair of vessels up to Handymax size and a floating dock for repair of vessels up to Suezmax size. The other associated facilities will include ship construction halls, wet and dry berths, final outfitting and commissioning quay, supporting infrastructures and services as well as training facilities.

On the rationale underlying the joint venture, Mr. Ng Thiam Poh, Senior Vice President, Corporate Development said “We are honored to be chosen by Al Mukairish to be its strategic partner in the development and operations of FDSCO Yard in Yanbu, Saudi Arabia. Through SMME, SCM will invest in and provide technical and management services to FDSCO. SMME will also provide opportunities for SCM to grow its marine, oil and gas business in the Middle East.”

On the partnership with SCM, Mr Saleh Al Mukairish, the CEO and main shareholder of Nasser Mohammed Al-Mukairish and Partners Company said ""We are grateful for the friendship that SembCorp Marine has shown us and we are excited for this opportunity for SembCorp Marine to bring their world-class skills and experience as our distinguished partner to develop the strategic FDSCO Project for the benefit of the Kingdom of Saudi Arabia. In this regard, I am confident that the FDSCO Project will be a mutually beneficial and successful one.""

The investment is not expected to have a material impact on SembCorp Marine’s earnings per share and net tangible asset per share for the current financial year. It will be funded from SembCorp Marine’s own internal resources.

About Nasser Mohammed Al-Mukairish and Partners Company (Al Mukairish)
 
Al Mukairish is a Saudi Arabian company owned by two brothers Mr. Nasser Mohammed Al-Mukairish and Mr. Saleh Mohammed Al-Mukairish. In addition to its normal course of business in real estate trading, the company is specialized in the area of real estate and infrastructure development projects. It has concluded several major projects in the city of Jeddah / Saudi Arabia, as well as in Sudan. The group of companies has businesses in the areas of road and bridge construction, concrete industry products (including ready mix concrete, pre-cast concrete and hollow core building systems) and investments in a steel rolling mill in Rabigh, Saudi Arabia.
 

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Judy Han (Ms)
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Email: judy@sembcorpmarine.com.sg
Website: www.sembcorpmarine.com.sg

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