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DAMEN eyes SBIC subsidiary

Released at: 11:26, 19/12/2014

DAMEN eyes SBIC subsidiary

Dutch shipyard plans on acquiring 70 per cent share with special permission sought from PM and MoT.

by Hung Khanh

DAMEN Shipyards Group (DAMEN) from The Netherlands is seeking to buy at least 70 per cent of Song Cam Shipyard (SCS), a subsidiary of the Shipbuilding Industry Corporation (SBIC) under a proposal submitted to the government. SBIC are seeking special approval from the Prime Minister and the Ministry of Transport (MoT) over the acquisition, which exceeds the 49 per cent cap imposed on foreign ownership.

Choosing DAMEN as a strategic partner of SCS is a part of SBIC’s equitization plan and SCS’s restructuring strategy.

Bright prospects

The DAMEN purchasing plan will not only contribute to SBIC’s foreign investment sources but also help the shipyard to improve management skills, upgrade technologies, transfer knowledge, train staff and expand markets worldwide, the corporation’s leader said.

DAMEN has operated well in Vietnam and been working with five shipyards for more than 12 years. Its most significant joint venture in the country is the DAMEN-Song Cam Shipyard, which cost VND1.26 trillion ($60 million), with the Dutch shipyard contributing 70 per cent.

DAMEN also hopes to buy a majority stake in Ha Long Shipyard (another subsidiary of SBIC) when it conducts an IPO in the beginning of next year.

Policy consistency

SBIC selling its shares to DAMEN is consistent with government policy, as Decision No.1224/QD-TTg allows for the gradual withdrawal of State ownership. However, Decision No.55 issued in 2009 by the PM states that ownership by foreign investors in listed companies must not exceed 49 per cent. In order for approval to be granted, a written petition has been sent to the PM and MoT seeking an exception in this case.

The two parties are expected to complete the deal in the middle of January if a positive decision comes from the PM and MoT.

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