BAKER TECH Management

STREET SMART

SHAREHOLDERS'   RiGHTS

Now the case of SembMarine. The world’s second-largest offshore rig builder got into a deal where, while having a 85-percent stake in PPL Shipyard, it unwisely left management control to the 15-per-cent stakeholder, PPL Holdings, which in turn is owned by Baker Technology, a company controlled by Dr Benety Chang, who is also the deputy chairman of PPL Shipyard.

Now, SembMarine is vigorously opposing Baker’s plans to sell its 15-per-cent stake in PPL Shipyard to China-based but Singapore-listed Yangzijiang Shipbuilding on the grounds that it has rights of first refusal.

Why? Because SembMarine is afraid with the Chinese in control, it would lose valuable rights to PPL Shipyard’s rig designs.

PPL is one of the world’s largest builders of offshore oil rigs and is a substantial contributor to SembMarine’s revenue and bottomline.

Yangzijiang is a major shipbuilder in China and desperately wants to be a major player in the rigs business which is expected to pick up with oil prices at current levels.

But SembMarine is offering just $59.4 million compared with Yangzijiang’s offer of US$155 million, or some $215 million.

If I were a Baker shareholder it would obviously not be in my interest to even consider SembMarine’s bid — little wonder the Yangzijiang offer was unanimously accepted by Baker’s shareholders at its recent extraordinary general meeting.

MERiTOCRACY  AUTiSM

Until Yangzijiang’s bid, everything was hunky-dory between the respective managements of SembMarine and PPL Shipyard.

This is not the first time SembMarine has been found wanting in the area of management oversight. A couple of years back, it allowed its head of finance to have lone control over its currency hedges and, as a result, found itself defending a slew of lawsuits by lending banks.

Years earlier, it went into fixed shipbuilding and ship repair contracts with no escalation clauses, resulting in a lawsuit involving the vessel

Both SembMarine and Khazanah appear to have been lulled into complacency when things were going their way and their respective partners brought in the results. But, shouldn’t they have prepared themselves for a worst-case scenario?Solitaire which cost the group a whopping $700 million to settle.

Conrad Raj

conrad@mediacorp.com.sg

The writer is editor-at-large at Today.

If you track their insider trading, actually the release some minor stocks to public, just curios why before meeting up to 10 cts even the AGM haven't announce yet...actually down by 2.5cts yesterday was a signal that this stock not that strong enough.

Just my opinion, bad experience from our beloved mermaid   

Saturday:  26th JUNE 2010

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Monday: 28th JUNE 2010

sUper  bOOmZ