Alam Maritim announced that its 51%-owned JV company, Deepsea Leader Venture (L) Inc, had signed a Memorandum of Agreement with Wellspring Marine Trading Ltd for the acquisition of an offshore support vessel (OSV), namely OLV Venture 1 for US$60m. OLV Venture 1 was built in 2014 and is currently  registered  in  China.  The  offshore  support  vessel  is  of  85M  DP2 6000 brake horse power, and is planned to be deployed in the operational waters  of  Malaysia  and  South  East  Asia  to  support  the  exploration  and production activities in the region. (Source: Bursa Malaysia)

Comments:  While management did not provide the detail  specifications of OLV Venture 1, we believe that it is a diving support vessel (DSV). We are positive on this acquisition. We expect the vessel to be delivered in 2Q15, thereby boosting Alam’s competitive edge in the domestic subsea services segment and enhance its profit margin. That said, the acquisition is within our expectations and hence, we are retaining our HOLD rating and TP of RM0.74.

Source: Affin Hwang Capital Research - 25 Mar 2015