Shipbuilder ASL Marine said on Friday that it was seeking additional credit lines to expand its ship repair operations after a “trying year,” as the shipbuilding recovery has been “slower than expected.”
“The management do not foresee the shipbuilding segment to improve significantly in the next 12 months,” Christopher Chong, chairman of the shipbuilder’s audit committee, said in a letter to noteholders which was filed to SGX after the market close on Friday.
“Due to the oversupply of Offshore Support Vessels (OSVs) in the market which resulted in a depressed pricing, the management has not been able to successfully execute its asset disposal plans,” he added.
Revenue for the fiscal year ended 30 June was down 18 percent on-year at S$280.5 million, despite an increase in revenue from ship-chartering and ship repair, it noted.
ASL Marine has shifted its focus to ship repair amid the slow shipbuilding recovery and as ship repair has seen increased projects with some upstream players readying their vessels for deployment opportunities, Chong said.
“However, these projects require revolving credit facilities and trade lines from the lenders. The management is in the midst of discussing with the group’s principal bankers on possible additional working capital lines so as to increase the business volume,” the letter said.
Chong added that ASL Marine would therefore call an informal meeting with its noteholders to provide an update on the business climate and financial performance, as well as the talks on the working capital lines.
In a separate SGX filing on Friday, ASL Marine said the meetings, which would be private and confidential, are scheduled for 18 September, in two sessions.