Keppel Marine buys majority stake in Subic Shipyard

Keppel Marine Philippines Inc. (KPMI) is buying out a number of local investors for a majority stake in the Subic Shipyard in Zambales. KPMI, a member of the 20-yard strong Keppel Offshore and Marine Group of Singapore, has agreed to buy the shares of International Container Terminal Services Inc., Magsaysay Shipping Corp., SM Development Corp., Insular Life Assurance Co. and the National Government in Subic Shipyard and Engineering Inc. The transaction, involving 452 million shares or 41.6 percent of Subic Shipyard’s outstanding stock, is estimated to amount to P2.8 billion. The proposed purchase will raise KPMI’s stake in Subic Shipyard to 79.1 percent from its current stake of 37.5 percent. “This is in line with Keppel Marine’s confidence with the long-term attractiveness of the marine industry and to increase its ship repair and shipbuilding capacities," the firm said. The approved price of the transaction is equivalent to about 58 percent of KPMI’s total book value and about 48 percent of the firm’s total assets. “The purchase price was arrived at on a willing buyer and willing seller basis, taking into account Subic Shipyard’s capacity, strength of its operations and competitive advantages," the company said. KPMI plans to have its stockholders approve the purchase at a special meeting in September. In the first quarter of the year, KPMI, a member of Singaporean conglomerate Keppel Corp. Ltd., posted an operating profit of P123 million, or almost 50 percent higher from last year's levels. The profit was achieved despite a 16-percent decline in revenue to P495.7 million in the same period. The company said the rise in profit can be attributed to the lower costs and operating expenses during the quarter. The company’s two wholly owned subsidiaries are Keppel Cebu Shipyard Inc. and Keppel Batangas Shipyard Inc. KMPI also has a 40-percent interest in Goodstart Properties Inc., which is involved in property development. –VVP/OMG, GMANews.TV