PPL Shipyard Completes Acquisition of Sabine Industries

Further to its announcement dated September 22, 2005, “SembCorp Marine’s PPL Shipyard Acquires Sabine Shipyard in Texas, USA”, SembCorp Marine is pleased to announce that its subsidiary PPL Shipyard has completed the acquisition of a 100 per cent equity interest in Sabine Industries, Inc. (SII) and its subsidiaries Sabine Offshore Services, Inc (SOSI) and Sabine Shipyards, Inc (SSI) and a 25 per cent equity interest in Sabine Vessels, Inc (SVI) for a total consideration of US$6.4 million. PPL Shipyard’s net consideration for the 100 per cent equity interest in Sabine Industries, Inc is based on the valuation of the net tangible assets of SII and its subsidiaries SOSI, SSI and associated company SVI. The acquisition will be funded from PPL Shipyard’s own internal resources.

The acquisition is in line with SembCorp Marine’s strategy to establish a strategic hub to serve its customers in the Gulf of Mexico region and to grow its offshore business. Barring unforeseen circumstances, SembCorp Marine expects a positive contribution to its earnings from the acquisition. However, this acquisition is not expected to have a material impact on the net tangible assets and earnings per share of SembCorp Marine for the year ending December 31, 2005. PPL Shipyard is a rig-building yard with proven track record in the building and servicing of jack-up and semi-submersible rigs. To-date, PPL Shipyard has built 26 jack-ups and 4 semi-submersibles, including two deepwater jack-up rigs for Global SantaFe International.

Sabine Industries, Inc is the holding company of Sabine Offshore Services, Inc., Sabine Shipyard, Inc. and Sabine Vessels, Inc. Sabine Offshore Services, Inc is a wholly owned subsidiary of Sabine Industries, Inc. The company specialises in the supply of consumables and bunkers to fishing and offshore vessels operating in the vicinity of Sabine. Sabine Shipyards, Inc is a wholly owned subsidiary of Sabine Industries, Inc. Its main activities include the repair and refurbishment of drilling rigs. The shipyard also provides offshore construction and related fabrication capabilities to the drilling contractors located in the Gulf of Mexico region. Sabine Vessels, Inc is a 25 per cent owned associated company of Sabine Industries, Inc. Its main activity is to own and operate vessels.