From Selling Compact Discs To Buying Offshore Vessels

Underneath this rather intriguing headline lies an interesting story. What would you do if you want to list your privately held offshore support services business on the Mainboard of the Singapore Exchange? Falcon Energy took a different approach and executed a back-door listing through Sembawang Music – a well known music retailer in Singapore in May 2006. Sembawang Music was an ideal acquisition target back then: It had only one business, with hardly any liability and more importantly controlled by only one major shareholder who was willing to sell out. And the rest is history. After selling its music retail chain store business, Falcon Energy grew steadily into an oil and gas operator with a focus on the production phrase of oilfield activities. It currently owns and operates nine offshore vessels, mainly work/accommodation vessels.

In the greater scheme of things, Falcon Energy announced a surprise major acquisition last Friday. It will be acquiring the entire 29.07% stake in CH Offshore, 205 million shares at SGD 0.70 per share from Malaysia’s Scomi Marine Berhad for SGD143.5 million (USD 101.7 million). Scomi Marine will pocket a profit of USD 18.6 million from the investment it made in 2005 and proceeds will be used to repay its existing borrowings.

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