O TTO M ARINE L IMITED - Microsoft Internet Explorer - SGX

We intend to upgrade our technical capabilities and to invest further in advanced equipment and
technology.
In addition, we are considering establishing a shipyard in China and our wholly-owned subsidiary OM
Offshore has entered into a capital investment agreement in October 2007 with the People’s Government of
Qidong City of Jiangsu Province, China for the construction of a shipyard in China. We are currently
evaluating the commercial viability of building a shipyard in China and in the process of applying for the
relevant licences, operating permits and authorisations from the relevant Chinese authorities for a wholly
foreign-owned enterprise in China. In particular, we are required to comply with the Medium and Long Term
Development Plan (2006-2015) issued jointly by the National Development and Reform Commission of The
People’s Republic of China and Commission of Science Technology and Industry for National Defense of the
The People’s Republic of China in 2006. Although this regulation prohibits a foreign investor to own more
than a 49% shareholding of a shipbuilding company established in China, we are in the process of seeking the
necessary exemptions from the relevant authorities. Subject to our evaluation of the commercial viability of
the project and the receipt of all relevant approvals, licenses and permits, we may commence establishing the
shipyard.
Under the terms of the capital investment agreement, we are contractually obliged:
(a) to invest up to US$99.0 million in Qidong for building the shipyard, provided that we are
satisfied with (i) the land parcel allocated by the People’s Government of Qidong City of Jiangsu
Province and (ii) the commercial viability of the shipyard;
(b) to pay a deposit of US$1.0 million to the People’s Government of Qidong City of Jiangsu
Province within 15 working days from the date of the capital investment agreement; and
(c) to apply for all relevant licenses, operating permits and authorisations from the relevant Chinese
authorities for the shipyard.
We have already paid the deposit of US$1.0 million and to date, we have complied with all of our
obligations under the capital investment agreement. The capital investment agreement does not have a specific
expiry date although it contains certain milestones which need to be met by the People’s Government of
Qidong City of Jiangsu Province as part of their contractual obligations (including sourcing for a suitable
piece of land). The People’s Government of Qidong City of Jiangsu Province is currently sourcing for a
suitable land parcel for us to establish the shipyard. In any event, we have the right to terminate the capital
investment agreement and recover the deposit that we paid if we are subsequently not allocated with a suitable
land parcel to our satisfaction.
In the event that we are allocated a suitable land parcel, we would then assess our funding options (which
may include debt, internal resources and/or new capital injection) at the relevant time, after taking into account
our cash flow position and our working capital requirements. We will commence work for building the
shipyard approximately nine to 12 months after the allocation of the land and regulatory approval and upon
completion of the construction of the infrastructure for the shipyard by the authorities in China. The shipyard
is likely to take 14 months to construct. These are estimated timelines only and there is no assurance that we
will be able to adhere to these timelines.
Significant Shipbuilding Projects
The significant shipbuilding projects which we have completed in the last three financial years and up to
the Latest Practicable Date and our major projects in progress as at 8 August 2008 are set out in the tables
below.
Completed Projects
The significant shipbuilding projects which we have completed in the last three financial years and up to
the Latest Practicable Date and our major projects currently in progress are set out in the tables below.
Year of
Delivery
Tonnage/
Power/
Capacity Type of Vessel
Type of
Customer
2005 . . . . . . 2,100 dwt Flat top barge Sale to related party (1)
2005 . . . . . . 2,100 dwt Flat top barge Sale to related party (1)
2005 . . . . . . 2,100 dwt Flat top barge Sale to related party (1)
2005 . . . . . . 2,100 dwt Flat top barge Sale to related party (1)
110
Date of Keel
Laying
Contract
Signed
September 2004 August 2004
October 2004 August 2004
January 2005 November 2004
January 2005 November 2004