Scomi Marine ... May 09

Norwegian tycoon John Fredriksen’s Deep Sea Supply plc announced that it had acquired a 5.5% stake in Singapore listed CH offshore Ltd, in a deal done on an opportunistic basis.

This piece of news could have far reaching consequences for CH Offshore. The company’s two largest shareholders are Scomi Marine Bhd, which has a 29.1% equity interest, and Singapore based Chuan Hup Holdings Ltd, which has 25%. Many speculate that this acquisition could be the precursor to Deep Sea Supply mopping up shares in the company, which could work out well for Scomi Marin.

It is no secret that Scomi Marine has been looking to hive off its stake in CH Offshore for sometime now. But Deep Sea Supply’s 5% stake did not come from Scomi Marine. The company has not disposed of any of its shareholding in CH Offshore.
Judging from the deep pockets of the Fredriksen-backed Deep Sea Supply the company is likely to strengthen its position in CH Offshore and take up a meaningful stake.

Fredirksen’s daughter Kathrine was appointed to the board of Deep Sea Supply recently.

So will Fredriksen buy more shares in CH Offshore via Deep Sea Supply? Why would he buy a 5% stake and leave it at that? He has the means to increase his shareholding and there is willing seller in the form of Scomi Mairne. It is rumoured that even Chuan Hup Holdings Is looking to divest its stake, which should suit Fredirksen, based on his past track record.

Scomi’s entry cost is said too be RM1.15 per share in an intricate corporate exercise. Scomi ended up with 29.1% of CH Offshore while Chuan Hup had 25%.

Fredirksen could be looking to merge Deep Sea Supply with CH Offshore as both companies are involved in similar segments in the offshore oil and gas business.