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expect to sign definitive facility agreements by the end of December 2008. The reason for the delay in the
finalisation of these banking facilities is because (a) these are new relationships and (b) there is a cross-border
element as the security package involves assets in Indonesia.
According to the term sheet, the facility from CIMB will include: (i) letter of credit and trust receipt
facilities of up to US$2.0 million and carries a floating interest rate based on 1.5% per annum above CIMB’s
cost of funds; (ii) refund guarantee facilities of up to US$10.0 million; and (iii) a treasury line of up to
US$1.0 million. These facilities are secured by a pledge of foreign currency deposits and a personal guarantee
provided by Yaw Chee Siew.
According to the term sheet, the facility from IFS Capital will consist of a term loan of up to
S$10.0 million and is secured by a fixed charge over two units of gantry cranes at our shipyard in Batam and
a personal guarantee by Yaw Chee Siew. This facility carries a floating rate of interest based on 1.25% above
IFS Capital’s base rate per annum or 3.0% above the one-month Singapore Dollar swap rate, whichever is
higher.
Our Directors are of the opinion that, after taking into account our present banking facilities, our existing
cash and cash equivalents, the cash flow generated from our operations and the net proceeds from the New
Shares, we have adequate working capital for our present requirements and anticipated capital expenditures for
the next 12 months.
Our future cash flow will be enhanced pursuant to income from our different business activities, including
sales proceeds upon delivery of vessels, our chartering business and our strategic partnerships. In addition, if
required, we will be able to tap on the working capital requirements allocation derived from the proceeds of
the Offering. Barring any unforeseen circumstances, the Directors believe that there will be no difficulties in
meeting repayment schedules.
We have been in dialogue with several financial institutions about obtaining additional facilities. Based on
these discussions and currently available information, the Directors believe that we will be able to secure
additional facilities to meet our funding requirements for our shipbuilding and other business activities.
However, we will only commence further discussions with our financiers at a later point in time if we require
additional funding.
We may raise additional funds through debt or equity offerings or the sale or other disposition of shares
or assets. Please see “Risk Factors — Risks Relating to Ownership of Our Shares — We may require additional
equity funding which may dilute your interests”.
Capital Expenditures
The table below sets out our significant capital expenditures for the historical periods indicated:
Financial Years
Ended 31 December
Description 2005 2006 2007
1 January 2008
to 31 May 2008
S$ S$ S$
(In thousands)
S$
Leasehold land and buildings ..................... 285 2,181 — —
Vessels ..................................... — — 35,559 —
Office equipment, furniture and fittings ............. 150 216 326 228
Motor vehicles. ............................... 270 279 479 —
Machinery and equipment ....................... 2,932 3,444 1,479 1,101
Construction-in-progress (1) ....................... 4,788 2,028 28,349 15,453
Total. ...................................... 8,425 8,148 66,192 16,782
Note:
(1) Construction-in-progress refers to capital expenditures incurred by us for construction which is still in
progress as at the end of each of the respective financial periods.
Our capital expenditures in FY2005 related primarily to improvement to the facilities at our shipyard in
Batam, Indonesia. These improvements consisted primarily of construction-in-progress and machinery and
equipment. Capital expenditures classified as construction-in-progress consisted of yard and workshop
improvement, amounting to S$2.5 million and the concrete flooring and wiring to the Syncrolift» area
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