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

Risks Relating to Our Business and Operations
Our businesses may be adversely affected by the current disruption in the global credit markets and associated
impacts.
Since the second half of 2007, disruption in the global credit markets, coupled with the repricing of credit
risks, and the United States and United Kingdom housing market deterioration and a slowdown in the global
economy have created increasingly difficult conditions in the financial markets. These conditions have resulted
in historic volatility, less liquidity, widening of credit spreads and a lack of price transparency in certain
markets. Most recently, these conditions have resulted in the failures of a number of financial institutions in
the United States and unprecedented action by governmental authorities and central banks around the world. It
is difficult to predict how long these conditions will exist and how our markets, products and businesses will
be adversely affected. These conditions may be exacerbated by persisting volatility in the financial sector and
the capital markets, or concerns about, or a default by, one or more institutions, which could lead to significant
market wide liquidity problems, losses or defaults by other institutions. Accordingly, these conditions could
adversely affect our consolidated financial condition or results of operations in future periods. In addition, we
may become subject to litigation and regulatory or governmental scrutiny, or may be subject to changes in
applicable regulatory regimes that may be materially adverse to us and our prospects. Furthermore, it is not
possible to predict what structural and/or regulatory changes may result from the current market conditions or
whether such changes may be materially adverse to us and our prospects. Conditions in the capital markets
could also adversely affect the Offering and limit or reduce the number of investors in our Shares, thereby
adversely affecting the liquidity and potentially the price of our Shares. See “— Risks Relating to Ownership
of Our Shares — Our Shares have never been publicly traded and the Offering may not result in an active or
liquid market for our Shares, which could adversely affect the price of our Shares”.
Our business is dependent upon the availability of financing.
We operate in a capital-intensive industry. Our shipbuilding operations require significant investments
during the construction phase. We presently source such capital for our business primarily through a
combination of internal cash, trade finance and external debt financing. Our growth strategy and the further
expansion of our business will require significant additional investments and capital.
Our shipbuilding operations and expansion plans are dependent upon and limited by our ability to secure
additional financing, on commercially favourably terms or at all. The terms of our debt financing arrangements
may require us to pledge collateral to the lenders and may contain restrictive financial covenants or covenants
which increase our costs or restrict our business and operations. In addition, any equity funding that we are
able to secure may only be possible if this is offered at a discount to the prevailing market price. See “— We
may require additional equity funding which may dilute your interests”. We may not be able to raise the
additional capital required to fund our operations and our growth, which would have a material adverse effect
on our business, results of operations and prospects.
The financing agreements of our Group contain certain restrictive covenants requiring us to maintain,
among other things, certain security margins and/or financial ratios. Further, under the terms of the vessel
construction loan from Caterpillar Financial and UOB, Yaw Chee Siew’s shareholding in our Company is not
allowed to go below 30% of the paid up share capital of our Company. See “Management’s Discussion and
Analysis of Financial Condition and Results of Operations — Borrowings”. These covenants may limit our
ability to operate or expand our business in the manner we would otherwise choose. Further, should our Group
breach any financial or other covenants contained in any of our financing agreements, we may be required to
immediately repay our borrowings together with any related costs, which could adversely impact our business,
results of operations and prospects. In addition, disruptions, uncertainty or volatility in the stock and credit
markets may limit our access to capital. These market conditions may limit our ability to replace, in a timely
manner, maturing liabilities and access the capital necessary to grow our business.
While we have so far been able to borrow the funds necessary to finance operations in the current market
environment, prolonged disruptions to the credit markets could limit our ability to borrow funds from our
current funding sources or cause our continued access to funds to become more expensive. As such, we may
be forced to delay raising capital or pay unattractive interest rates, thereby, increasing our interest expense,
decreasing our profitability and significantly reducing our financial flexibility.
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