It offers to reveal contents of agreement; SembMarine says it is 'null and void'

By VEN SREENIVASAN



BAKER Technology has revealed for the first time a confidential Joint Venture Agreement that it had with Sembcorp Marine over a shipyard the two companies jointly own - and offered to make it public. The agreement apparently defines management and board control at the shipyard which the outfits are now squabbling over.



But in an intriguing response, SembMarine claims that the mysterious JVA is now null and void.

As the tussle between the two continued, Baker's 100 per cent owned PPL Holdings fired the first salvo yesterday. In a letter to SembMarine CEO Wong Weng Sun, and copied to the Singapore Exchange, Share Investors Association of Singapore and all newspapers, PPL said that it was prepared to waive its rights to a confidentiality clause in a 2001 Joint Venture Agreement which defined control over PPL Shipyard, and allow it to be a matter of public record.

'Please advise if you are likewise agreeable and we can request for our parent company, Baker Technology Ltd, to post the Joint Venture Agreement on the SGXNET for dissemination to the general public,' PPL Holdings said in a letter which BT received.

But SembMarine insisted that the JVA - the contents of which remain unknown to the investing public - is null and void.

SembMarine said that following its offer of $59.4 million for PPL Holdings' 15 per cent stake in PPL Shipyard, it has now become 100 per cent owner of the shipyard 'and that as a consequence, the joint venture agreement dated 9 April 2001, to the extent and in the form as it then subsisted, ceased to be in force'.

It added that on May 13, it had sent a letter to PPL Holdings informing it that the Joint Venture Agreement had been terminated from that date on account of 'breaches' by PPL Holdings.

Baker, through its wholly owned PPL Holdings, has been going toe-to-toe with SembMarine over the former's decision to sell its 15 per cent stake in PPL Shipyard to China's Yangzijiang for US$155 million.

SembMarine, which owns 85 per cent of PPL Shipyard, has objected to the sale, citing its 'pre-emption rights' over any such sale, and offered the $59.4 million for the remaining 15 per cent stake in the shipyard. But PPL Holdings rejected the offer.

The issue took on added prominence this week after a commentary in BT asked why SembMarine, despite having overwhelming majority shareholding, seemed unable to assert more control over the management or sale of the shipyard to the Chinese company.

In a letter published in yesterday's BT, SembMarine pointed out that according to the Memorandum and Articles of Association of PPL Shipyard, it had six out of a total of nine directors on PPL Shipyard's board. It made no mention of the existence of a separate Joint Venture Agreement.

It further asserted that it was incorrect to say that PPL Holdings had any rights to PPL Shipyard's board seats or management: 'It has none.'

But PPL Holdings asserts that the issues raised so far pertain to legal contractual clauses set out in the Joint Venture Agreement, and supplemented by a supplemental letter dated July 5, 2003.

'Whilst the Memorandum and Articles of Association of PPL Shipyard Pte Ltd is a matter of public record, the Joint Venture Agreement is not available to the public,' PPL Holdings said.

'Distorted views are being formed every hour by the public because they do not have full information on the above mentioned issues,' it added.