SembCorp Marine Ltd 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% 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% 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% to 7.5% equity stake in FDSCO over and above the initial 2.5% stake. SCM also has an option to acquire up to 80% 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

Tags: SembCorp Marine