Titan buys Chinese shipyard

Integrated oil logistics provider Titan Petrochemicals Group Limited (Titan) has reached a definitive agreement to acquire a 100% interest in Titan Quanzhou Shipyard from its majority shareholder for a total consideration of $170 million.

The acquisition is in line with Titan?s stated strategy of transforming its business away from the volatile VLCC business, towards an integrated oil logistics model, in order to accelerate growth and increase stability in earnings. Titan Quanzhou Shipyard (TQS) said the company is a unique world-class multi-functional facility focused on ship repair, ship building and offshore engineering.

The shipyard commenced operations in 2006 and the first newbuilding was launched in August 2007 in the shape of the 6,500 dwt bunkering tanker Titan Honour. TQS currently has a strong order book of 22 vessels, amounting to approximately $210 million. Construction of the ship repair and offshore engineering yards started in December 2006 and all three businesses are expected to be fully operational by the end of 2009.

The transaction, which is subject to independent shareholder approval and customary closing conditions, is expected to close in October, 2007. Titan realized $13.5 million from selling vessels, and it plans to sell two more in the second half.