Singapore’s Beng Kuang Marine has agreed to sell a further slice of its shipyard facility in Batam, Indonesia as it looks to bolster its finances.
The Singapore Exchange-listed company is selling around 100,970 square metres of the facility for SGD 9.89m ($7.3m) to PT Bukit Batu Mulia.
The buyer is a joint venture between local Indonesian businessman George Santos, who has interests in mining and shipping, and China’s Nanshan Group, which is involved in aluminium processing, fabric and garment manufacturing and processing, real estate, finance, scientific research, education, tourism and the health sector.
In April 2023 Beng Kuang Marine agreed to sell 30% of its Batam shipyard property, or some 90,000 square metres, to US-listed Oil States Industries for SGD 8.64m.
In recent years, Beng Kuang Marine has been prioritising cost-cutting, monetising fixed assets and other deleveraging initiatives.
The company said the gross proceeds from this latest transaction will be used to reduce the group’s borrowings and for general working capital.
Beng Kuang Marine said the parts of the yard being sold have remained underutilised since 2014 due to the downturn in the offshore oil and gas sector.
“The cash proceeds from both sale transactions of our Batam shipyard property are expected to significantly boost our liquidity resources,” said Beng Kuang Group chief executive Yong Jiunn Run.
“Coupled together with the rest of our deleveraging initiatives, it will allow us to stay nimble and agile in navigating through the current rising interest rate environment.
“More importantly, it provides a stronger financial footing for us to pursue high-growth opportunities within our infrastructure engineering and corrosion prevention business segments where we have an entrenched market position and strong technical competencies,” he added.
In late February 2023, Beng Kuang Group reported a 71% year-on-year increase in its interim net loss to SGD 23.8m despite revenue increasing by over 18% to SGD 30.1m.
Earlier this month, Beng Kuang Group disclosed that it faced being delisted from the SGX after posting three consecutive years of financial losses.
The company confirmed in a regulatory filing that it had been placed on the SGX Regulation’s (SGX RegCo) watch list on 6 June 2023.
If the company does meet the relevant requirements to exit the SGX watchlist within 36 months, it may be delisted or have its shares suspended with a view to a delisting.
Other maritime-related companies making the latest SGX RegCo watchlist include offshore support vessel operators CH Offshore and Jasper Investments.
The SGX has 50 maritime-related companies listed on the exchange with a total market valuation of around SGD 22bn, according to a recent presentation.
