Sembcorp Marine objects to sale of PPL Shipyard stake to Yangzijiang

Should China's Yangzijiang Shipbuilding succeed in buying a 15 percent stake in Singapore's PPL Shipyard, its relationship with Sembcorp Marine (which owns the other 85 percent of the offshore drilling rig yard) could be less than cosy.

According to Singapore Stock Exchange announcements on Saturday, Baker Technologies has accepted Yangzijiang's offer for PPL Holdings, through which Baker holds the 15 percent minority stake in PPL Shipyard. Yangzijiang has duly deposited the entire $155 million agreed purchase price with an escrow agent.

However, Baker Technologies notes:

"The Company received a letter on 22 April 2010 from SCM through its lawyers demanding that the Company not accept the Offer. SCM is the owner of 85% interest in the capital of PPL Shipyard. SCM has alleged that any sale to the Purchaser of the shares of PPLH by the Company would be made in circumvention of the pre-emptive rights of SCM in PPL Shipyard's Articles of Association by not giving SCM a first right of refusal over the sale of PPLH's shareholdings in PPL Shipyard.

"The Board has sought and received legal advice that SCM has no basis for its claims."