Titan in talks to acquire oil rig shipyard
Injection of asset key in shake-up of debt-laden company, which awaits backing from creditors and a deal with Singapore maker of oil rigs
Debt-laden Titan Petrochemicals says it is in advanced talks with an unidentified Singapore-based manufacturer of oil drilling rigs to use a mothballed shipyard that may be injected by major shareholder Guangdong Zhenrong Energy into Titan.
Guangdong Zhenrong has been trying to convince creditors since late last year to accept its proposal to restructure Titan's debt of more than US$400 million.
Guangdong Zhenrong hopes the creditors will make up their minds soon, after the release by Hong Kong-listed Titan a week ago of its financial statements for 2012, which said its auditor was unable to find sufficient evidence to support their truthfulness, said Titan chief executive Tang Chaozhang.
"The foundation for Titan's restructuring is the shipyard, which is potentially its only viable asset," Tang said. "Guangdong Zhenrong has been working hard to find a partner to make use of the asset and come up with a viable business model."
In November last year, Titan signed a memorandum of understanding with an unnamed Singapore-based rig maker, which Tang said was a regional industry leader.
Citing a confidentiality agreement, he declined to discuss the potential means of co-operation, except to say that equipment could be installed at the shipyard in Fujian province to enable rig manufacturing.
The foundation for Titan's restructuring is the shipyard, which is potentially its only viable asset