OTTO MARINE to ride on Western Australia O&G boom through A$5m acquisition

We are prepared to further invest capital, vessels, manpower, etc. to take Go Marine to its next leg of development, said Otto Marine's executive chairman, Mr Yaw Chee Siew. Photo by Sim Kih

OTTO MARINE'S wholly owned subsidiary, Otto Ventures, has struck a deal for a one-year option to acquire Aussie offshore fleet operator Go Marine for A$5 million.

"The market in Australia is definitely booming. Go Marine's chartering platform is a rare and unique opportunity for us," said Otto Marine’s executive chairman, Mr Yaw Chee Siew at a media conference today.

The management believes the acquisition will give Otto more exposure to Western Australia’s boom in oil and gas production, with mega projects like Gorgon, Wheatstone, Browse Basin and the Inpex Ichthys.

Go Marine has a very strong chartering platform, and is the region's fastest growing hydrocarbons industry vessels operator and offshore labor services provider. Its customer base comprises of an extensive list of oil majors including Chevron, Woodside, Apache, BHP, SHELL, Exxon Mobil, etc.

The network will also bring opportunities for Otto’s shipbuilding division, which can custom-build vessels for these oil majors.

This is Otto's first investment in an Australian marine company, even though its vessels have been chartered to customers who operate in Aussie waters.

Charter rates there are higher due to regulations that restrict maritime crew to Australians.

Otto did not have its own chartering team in the past, and chartered out vessels on bareboat basis.

On the other hand, Go Marine operates over twenty vessels (19 offshore vessels and 15 inshore vessels) with a strong ship management team.

Established in 2007, Go Marine is one of Australia’s top three marine and offshore logistics providers and has been in joint ventures with Otto Marine since Jun 2009.

Go Marine now has access to Otto's dockyard and shipyard in Batam, a service which is very expensive in Australia. Photo by Leong Chan Teik

It also operates vessels outside of Australia, including India, UAE, Russia, Indonesia and New Zealand.

It has two operating subsidiaries, Go Offshore and Go Inshore: Go Offshore provides ship management and crewing services for anchor handlers and platform support vessels. Go Inshore provides port and harbor services.

The option comprises two transactions --- a 49% stake comprising of new shares in exchange for extending to Go Marine a 7% A$15 million loan for 5 years, and the remaining 51% of vendor shares for A$5 million.

Loan proceeds will be used for working capital and repayment of bank loans.

Otto Ventures has already exercised its rights to acquire 19% of the interim enlarged share capital of Go Marine.

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