Drydocks World buys Singapore firm

Business Materials 30 October 2007 09:00

Dubai Drydocks World is buying Singapore shipbuilder Labroy Marine for $1.63 billion as the company pursues shipyard acquisitions abroad.

It will be the company's second acquisition of a big Singaporean marine construction and engineering firm within months.

Drydocks World, part of Dubai World, said it has received irrevocable undertakings from holders of 65.49 per cent of Labroy shares. The $1.63 billion offer represents a premium of 3.4 per cent over Labroy's closing share price on Friday.

"The acquisition of Labroy is integral to the Dubai World group's diversified strategic investment plans in Asia," said Sultan Ahmad Bin Sulayem, chairman of Dubai World.

The company, which owns one of the Middle East's biggest shipbuilding and repair facilities in Dubai, said its "core strengths" matched with those of Labroy.

Dubai World has secured financing commitments from banks for the acquisition. It did not say which banks are providing the funding.

The Singaporean firm is involved in ship repair, shipbuilding and construction of offshore rigs for use in the oil and gas industry. It has two full-service shipyards in Batam, an Indonesia island near Singapore, and a fleet of vessels.

Geoff Taylor, chief executive officer of Drydocks World, pledged "to safeguard continuity of operations" and said the company will work with the Labroy management to ensure a smooth handover of business.

"The acquisition of Labroy, an established shipyard in Southeast Asia, is another well thought out strategic step in taking the expertise of the Drydocks World group of companies to the international stage," Taylor said.

"At this time, Drydocks World does not envisage making major changes to the business, redeploying assets, or discontinuing the employment of any of Labroy's employees," he added.

Drydocks World said the acquisition will consolidate its place among global ship repair and shipbuilding facilities and provide entry into the rig building business.

Drydocks World comprises Dubai Drydocks and Drydocks World-Singapore and also operates Platinum Yachts FZCO and Platinum Yacht Managements LLC, which are focused on the luxury craft business. ( Gulf )