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Singapore Yard Explores Iran Offshore Partnership

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May 14, 2016

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Singapore Yard Explores Iran Offshore Partnership

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Iran’s IRNA news service reported this week that Singapore’s Kim Heng Holdings signed a non-binding agreement with the state-owned Iran Marine Fund for up to $450 million in financing for offshore facilities and other maritime ventures (distributed over a ten year period).

“The parties agreed to cooperate in various spheres including manufacturing of platform supply vessels, offshore cranes, chemical tankers, and also aluminum and fiberglass vessels,” said Tan Keng Hoe Melvin, general manager for supply chain management for Kim Heng. He added that “maximum domestic production in Iran has been emphasized” for the projects.

In a release, Kim Heng said that the partnership could include shipbuilding, chartering of Kim Heng’s assets, purchasing of offshore vessels, rig management and offshore maintenance. It cautioned that while the agreement provided a basis for exploring business relationships, “the commercial terms and form of financing for each project . . . will be negotiated on a project by project basis and documented in definitive agreements. As such, there is no certainty that any of the projects will materialize or that any definitive agreements could be entered into.”

Kim Heng is a diversified marine services firm with capabilities in offshore rig topsides construction, offshore supply chain, shipbuilding, ship repair and the provision of riding gangs. It has facilities in Singapore for afloat repairs plus its own fleet of tugs and OSVs.

Earlier this week, Kim Heng announced that “it has implemented cost control initiatives to better prepare for the challenging oil and gas downturn,” including a five to 20 percent pay cut for senior management and the board of directors.

“The current low oil price environment warrants conservative management of our cost structure . . . we will continue to review our cost cutting measures as well as our capex spending on an ongoing basis,” said group CEO and chairman Thomas Tan. It is also reducing the number of its foreign workers, but it hopes “to balance business necessity with compassion . . . [we] are thus providing voluntary additional compensation to departing foreign workers who have served us with excellence.”

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