Restructuring underway Under Review

Sale of United Envirotech Limited shares.

& Marine (VOM) announced the disposal of 32m shares in

United Envirotech Limited (UEL), through a series of married

deals and also on the SGX open market, reducing its stake to

4.48% from 11.19% previously. This move is not surprising as

the management has always reiterated its intention to dispose

of its non-core assets.Viking Offshore

Estimate realized gain of $5.8m.

were booked as available-for-sale assets, were purchased in

June 2008, at an average price of $0.21 per share. The

investment was impaired when the market price of the shares

fell to $0.12 per share as at 31 Dec 2008. Subsequent

appreciation in the market prices of UEL shares were credited

to a revaluation reserve in the balance sheet. With average

selling prices for the married deals and open market trades at

$0.30 and $0.33 respectively, disposal of UEL shares would

realize gains of about $0.18 per share. This translates to

approximately $5.8m of realized gains. Sales proceeds totaled

about $9.66m in cash, and will be utilized towards the

repayment of loans and payables. We believe this would

improve VOM's cash flows in the near term.The UEL shares, which

Restructuring process underway

Viking Airtech Pte Ltd in late 2009, VOM has sought to

transform itself from a consumer products company into an

O& M player. To date, the company has disposed off a number

of non-core investments such Tung Lok Restaurants Limited

and UEL shares. VOM has also made several acquisitions of

companies in the O& M space as it seeks to become an

integrated solutions provider to shipyards and vessel operators.

Recall that the VOM's strategy comprises of three key stages:

(1) invest in complementary businesses, (2) integrate the

different businesses to extract add-on values, and (3)

internationalize its operations. We believe the company is

currently executing second stage of its strategy.. Since its purchase of

Experienced management.

company's strategy is aided by the fact that it is helmed by a

very experienced management team. VOM Chairman Mr Andy

Lim is a seasoned dealmaker, and is also the founder and

Chairman of private equity firm, Tembusu Partners. CEO Mr

Ong Choo Guan has over 30 years of management experience

in the O& M industry.In our view, execution of the

Rating under Review.

coverage, we are still in the process of revising our estimates

hence, we are putting our Buy rating and S$0.31 fair value

estimate under review.However, due to a change in analyst