“In view of the current weak market conditions, the group has decided to consolidate its yard operations at its marine base in Batam, Indonesia,” Vallianz said in a statement to the Singapore Exchange (SGX). The shut down of the Singapore shipyard is also due to a discontinuation of business with a key local customer, Vallianz.
Vallianz explained that the decision to cease the Singapore shipyard operations follows the closure of the group’s businesses in the provision of crew management services to external parties and travel services to the offshore oil and gas industry.
“The closure of these non-core business units is part of a rightsizing exercise that is expected to reap cost savings for the group. In addition, these initiatives will enable the group to concentrate its resources on core business units, particularly in profitable vessel chartering operations which are based primarily in the Middle East,” it said.
The company said the Batam base will continue to service the group’s fleet of vessels and support activities required to fulfil its chartering contracts.
Vallianz has a joint venture operation with Saudi Arabia’s Rawabi Holding in the Middle East, where oil and gas production activities and investments remain positive.
In November last year, Vallianz redeemed in full its SGD60m ($43m) notes issued in May 2014 under the company’s multicurrency debt issuance programme. The notes were funded by internally-generated funds and advances from its partner Rawabi Holding.