Kim Heng sells 70% of Bridgewater Offshore to Umbilicore for $26.8m

Singapore's Kim Heng Ltd. has signed a binding letter of intent to sell 70% of its wholly owned subsidiary Bridgewater Offshore to Weft + Water Holdings, trading as Umbilicore, for US$26.8 million in cash, equivalent to about S$34.1 million.

The mainboard-listed offshore marine services provider will transfer 6,092,897 shares, representing the 70% stake, at closing. The deal also includes an arrangement transferring the economic and voting rights over a further 10% of Bridgewater through a separate option, which means Umbilicore will immediately control 80% of the subsidiary while Kim Heng retains a 10% to 20% equity interest.

The sale fits a stated strategy of monetising vessel assets, cutting debt and pivoting towards engineering capabilities in geotechnical and cable-laying work. Kim Heng plans to keep earning recurring revenue by providing yard, waterfront and operational support to Bridgewater under its new owner, which leaves the seller attached to the asset commercially after giving up control of it.

The transaction is classified as a major transaction under Chapter 10 of the Catalist Rules and will lift Kim Heng's net tangible asset per share to 9.99 cents. The company says the divestment will increase net assets and substantially reduce both debt and total assets.

Beyond the upfront US$26.8 million, the letter of intent provides for contingent payments tied to options and performance milestones. Total potential consideration reaches US$35,631,560, including US$1.68 million for an additional 5% stake, US$5.12 million via a put option and a US$2 million milestone payment. None of those amounts is payable at closing, and each depends on options being exercised or a performance hurdle being met.

The structure reflects a wider pattern among offshore marine players, which have been shedding capital-heavy vessel assets while holding minority stakes that keep them exposed to any subsequent growth in the businesses they have sold.