Expect new owner to focus on increased productivity: Seamec

Promoter Technip has decided to divest majority of its stake in  Seamec because it wants to focus on bigger business, CJ Rodricks, MD, Seamec says. 

French EPC major in the oil sector, Technip holds 75 percent stake in the company and will divest it to HAL Offshore for up to Rs 246.62 crore.

HAL Offshore will be the new promoter now and is looking to acquire 55-75 percent stake. An open offer to the minority shareholders of Seamec is at a price of Rs 97 a share, a discount of about 3 percent to Tuesday's closing price of the company.

Speaking to CNBC-TV18 about this development, Rodricks says that he expects the new owner to focus on increased productivity. 

Seamec is a provider of diving support vessel based diving services globally. The company is hopeful of maintaining profits it achieved in Q3FY14 and cash on books currently stands at Rs 100 crore, Rodricks adds.

Also Read: Seamec sees better oveseas biz pricing; eyes spending cuts

Below is the edited transcript of CJ Rodricks' interview with CNBC-TV18's Latha Venkatesh and Reema Tendulkar

Reema: Can you tell us what the change in guard at Seamec will mean for the company, is there going to be any synergies with HAL Offshore?

A: I hope this change in guard will work out well for Seamec. Within Technip, we were quite a small little piece of the entire company. With HAL Offshore we will be the main unit, so I hope that the focus on new tonnage, expansions and things like that will improve.

As for the change of guard within the organization is concerned, at present I do not feel that there will be any major changes until the new owners get a feel of how the company runs and what they want to do. It might happen later on, but right now we stay as we are.

Latha: It is surprising that your current owners want to sell out. Would you know what their compulsions are?

A: It is a very clear discussion that they have had in many meetings with us. They have been focusing on large differentiator kind of assets. For them Seamec was not in the strategic plan because small assets, smaller dive vessels which we have, they could easily hire it when they needed it for the project, so they did not want to hold smaller assets but rather go to differentiator, larger assets, the systems or more modern to do the work. These were easily available in the market. Also, we were the only listed company in the group – it was also a cause for concern that being a listed company would probably have liabilities in the future.

Reema: What has disappointed the shareholders is that the open offer has come in at a price of Rs 97 which is slightly lower than where the stock is currently quoting. Your comments on that.

A: I have no comment on that. That is for the new promoters to deal with.

Reema: Has HAL Offshore laid out a blueprint or have they spoken to you about how they plan to improve the financials of the company, have they laid out any goalpost because the performance for Seamec – you have been undertaking a bit of a turnaround and the performance has been a bit of a subpar, so have they laid out goalpost financially?

A: No. There were other people in the running. It is not that there was only one company. So, detail or goalposts have not yet been laid out.

Latha: A bit about the financials of your company, what is the cash on your books?

A: We have got Rs 100 crore of free cash.

Latha: You notched up decent revenues of Rs 126 crore if I am not mistaken in the third quarter, should we assume that your profit as well of Rs 30 crore would be the kind of pro rata profit we should assume for Q4 and next year's Q1?

A: You can assume because the vessels have continued to work.

Latha: What kind of run rate should we assume in terms of revenue and profit growth or revenue and margins?

A: If we continue to keep all the vessels working unless we have a dry dock or we have no job or something like that then what we had in Q3 should be sustainable.

Reema: On synergies between Seamec and the new owners – can there be any financial benefits, can your margins improve?

A: Yes, they should.

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