Marco Polo Marine's big boss shells out for another 1m shares

Each share is worth $0.42.

According to a OSK DMG, on Monday, the controlling shareholder and Chairman of MPM purchased another 1m shares at SGD0.42. This is the highest price that he has been willing to pay for MPM shares in the last three years, signaling his strong confidence in the company’s prospects.

This is supported by positive industry developments – MPM is the prime beneficiary of the enforced cabotage law in Indonesia which has forced out 20% of the modern AHTS supply. 

Chairman raises stake to 59.52% at highest price in three years. With the 1m additional shares purchased at SGD0.42 yesterday, Mr. Lee now owns 202.8m shares of MPM or 59.52%.

Here's more from OSK DMG:

The critical point is the purchase price – this is the highest that he has been willing to pay in the last three years. Prior purchases were made between SGD0.33 and SGD0.35, with the exception being the SGD0.395 purchase around the IPO period of its Indonesian associate PT BBR.

Indonesia’s recently-enforced cabotage law has forced out 20% of the modern AHTS supply. The cabotage law was enforced for AHTS vessels after 31 Dec 2012. This has caused foreign operators to see their contracts cancelled and the vessels sent out of Indonesian waters.

Our industry sources inform us that there are only about 30 modern AHTS vessels between 5000bhp and 8000bhp size in the whole country. Of these 30, we are aware of at least six which have been forced out of the country.

MPM is the prime beneficiary of the cabotage law. With the supply suddenly shrunk by 20%, charter rates have spiked about 20% higher than regional rates. MPM’s four AHTS vessels in Indonesia are now reaping the benefits of high charter rates, high margins, and high utilisation rates.

Top in class in terms of technical capabilities. MPM’s AHTS vessels have sustained bollard pulls averaging 15% above the norm. This ensures that their vessels are always preferred, ahead of others when competing for charters. Their shipyard also recently outfitted a DP-3 vessel, which is an impressive achievement for a small shipyard. We count fewer than a dozen shipyards in Singapore which can outfit DP-3 vessels.