Beng Kuang Marine Limited and Epsilon Navigation Forge 50:50 Joint Venture to Own and Operate Ballast Barge

Key Highlights

• Joint Venture Formation: Beng Kuang Marine Limited (“BKM” or “the Company”) has entered into a Shareholders’ Agreement with Epsilon Navigation Pte. Ltd. (“Epsilon”) on 16 April 2026, formalizing the establishment and joint ownership of Offshore Collective Pte. Ltd. (“the SPV”).
• Equal Ownership Structure: Both BKM and Epsilon will each hold 50% of the enlarged issued share capital in the SPV post-completion. The SPV will be recognized as a joint venture within the BKM Group.
• Strategic Asset Acquisition: The SPV is created specifically to own and operate a ballast barge that is currently under construction by BKM’s Infrastructure Engineering division.
• Order Book Impact: As at 31 March 2026, the Group’s PT Nexus Engineering Indonesia (“NEI”) shipbuilding order book stands at approximately S\$15.8 million, out of which approximately S\$2.8 million is related to the ballast barge transferred to the SPV.
• Related Party Transaction: The S\$2.8 million contract value for the ballast barge will be classified as a related party transaction due to the change in ownership structure, but the underlying commercial terms remain unchanged.
• Financial Impact: The transaction is expected to have a positive effect on the Company’s earnings per share and net tangible assets per share for the financial year ending 31 December 2026.
• No Director or Shareholder Conflict: None of the Directors or controlling shareholders of BKM has any direct or indirect interest in the SPV. The transaction does not constitute an Interested Person Transaction under Chapter 9 of the SGX-ST Listing Rules.

Details for Investors

The Board of Directors of Beng Kuang Marine Limited announced a significant corporate development that could have a material impact on the Group’s financial performance and strategic positioning. The Company and Epsilon Navigation Pte. Ltd. have formalized a joint venture agreement to co-own Offshore Collective Pte. Ltd., a special purpose vehicle (SPV) set up to own and operate a ballast barge that is currently being constructed by the Group’s Infrastructure Engineering division.

Upon completion of the capital injection and subscription for new shares, both parties will hold equal stakes (50% each) in the SPV. The SPV will be accounted for as a joint venture of the Group, which may enhance operational efficiencies and open up further collaboration opportunities with Epsilon.

Importantly, the ballast barge forms part of NEI’s substantial shipbuilding order book, valued at approximately S\$15.8 million as at the end of Q1 2026. The value of the barge construction contract is approximately S\$2.8 million. This portion will be considered a related party transaction due to the revised ownership structure, but it is crucial to note that there is no change to the underlying commercial contract terms.

The Board expects this transaction to have a positive impact on both earnings per share and net tangible assets per share for the 2026 financial year, which is potentially value-accretive for shareholders. Such an announcement is price-sensitive and could positively influence investor sentiment due to the anticipated improvements in financial performance and the Group’s ability to secure and execute strategic joint ventures.

There are no conflicts of interest with Directors or controlling shareholders, and the transaction is in compliance with SGX-ST Listing Rules, with no classification as an Interested Person Transaction.

What Shareholders Need to Know

• The joint venture strengthens BKM’s asset base and expands its service capabilities, potentially paving the way for further growth in the offshore engineering segment.
• The positive financial impact expected from this transaction may enhance share value in the near to medium term.
• The transaction’s compliance with regulatory requirements and absence of related party conflicts ensures robust corporate governance.
• The formation of the SPV and the capital injection mark BKM’s commitment to capitalizing on its strong shipbuilding order book and leveraging strategic partnerships to improve asset utilization.

Conclusion

This development marks a significant milestone for Beng Kuang Marine Limited, highlighting its ability to attract strong partners and create additional value for shareholders through the strategic deployment of its engineering and shipbuilding capabilities. The positive expected impact on earnings and net assets could act as a catalyst for the Company’s share price in 2026.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own research and consult a qualified financial advisor before making investment decisions.

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