5 S'pore firms tie up to seek projects in Russia, the Mid-East
(2003-10-22)

5 S'pore firms tie up to seek projects in Russia, the Mid-East

IN a move described by International Enterprise Singapore as a rare occasion, four locally listed players in the oil, gas and process industry together with a private firm have joined forces to bid for projects in Russia and the Middle East.

Perhaps as a result of the market having caught wind of the unified move, stocks in the four listed counters saw relatively heavy trading over the past few days.

In a memorandum of understanding (MOU) signed yesterday, the five companies agreed to form a consortium to provide integrated turnkey construction services to the oil and gas industry, with specific focus on the oil-rich regions of Sakhalin (Russia) and the Middle East.

Called Singa Consolidated Engineers & Constructors (Singa), the joint venture comprises Rotary Engineering, Hiap Seng Engineering, Tiong Woon Corporation Holding and Federal International - which are all listed - and Plant Engineering Construction Pte Ltd.

The relatively heavy trading of shares of the four listed companies resulted in Hiap Seng suspending its counter yesterday after it was queried by the Singapore Exchange about the substantial increase in its share price and trading volume.

The company's share price has risen 72.6 per cent from 31 cents a week ago to an all-time high of 53.5 cents at its last trade yesterday.

Under the MOU, Rotary and Hiap Seng will each have a 31.25 per cent stake in the venture, while the other three companies will each hold a 12.5 per cent stake.

Singa will have an authorised capital of $100 million, with an initial paid-up capital of $1 million which may be increased to a maximum of $20 million.

The company has already made bids for a project in Sakhalin and another in Qatar, both worth 'hundreds of millions of dollars'.

'We will probably know the result of our Sakhalin bid early next year,' said Tan Ah Lam, managing director of Hiap Seng Engineering.

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