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PACC Offshore Services Holdings Ltd. - Was POSH Mogami insured?

Kiran Rameshchandra

23/7/2014 – Shares in PACC Offshore Services Holdings (POSH) have barely moved, following an accident last week in which three people died.

The Maritime and Port Authority of Singapore (MPA) first announced last Sunday that a vessel named POSH Mogami sank near the Indonesian island of Batam on Friday night.

It said the semi-submersible barge was carrying out submerging trials at the time of the incident, with nine people on board.

Indonesian authorities rescued a further six people.

There was some media coverage in the TODAY paper and Straits Times, which referred to a statement from the company, and news coverage in the Jakarta Post newspaper.

But at the time of publication, recently-listed PACC has not made an announcement regarding the issue to the Singapore Exchange, and the statement does not appear on its website.

Shareholders will obviously wonder whether the company will be financially impacted due to the sinking of one of its vessels.

Meanwhile, the concerns that Investor Central highlighted with one of its Mexican joint ventures, Servicios Marίtimos Gosh, S.A.P.I. de C.V. (GOSH), in the Dog or Darling report, published in May 2014, has taken a new direction.

This is because there were two announcements made by the company on May 21 and July 16.

The first report says that the Mexican State Administrator has obtained a court order for PEMEX, the Mexican state-owned petroleum company, to stop paying charter hire on vessels chartered from Oceanografia, S.A. de C.V. (OSA).

In a nutshell, GOSH has chartered six vessels to OSA, which are in turn, chartered by OSA to PEMEX.

So, GOSH had filed an injunction in the Mexican Courts to nullify the order for which a hearing on the matter was to be held on May 28, 2014.

The company has not provided any further updates on this issue.

The second announcement is a surprise.

It says that Grupo Pegaso, a Mexican conglomerate, may acquire interests in the company’s joint ventures in Mexico which are involved in the owning and chartering of offshore support vessels.

Does this indicate that POSH is finding it difficult to operate in Mexico? Or has POSH lost hope of receiving any money that it invested and loaned to its partner?

Investor Central. Asian insights for global investors. We ask the tough questions of Asian companies which global investors need answers to.


1. What happened?!

This is the obvious first question, and even if the company can’t answer it immediately it should have some idea what went wrong.

And whether the vessel can be raised.

It would be nice if the statement which was apparently made available to the Straits Times and TODAY newspaper was also made available to the general public and investors.


2. Was POSH Mogami insured?

The prospectus says that POSH Mogami was owned by a 50:50 joint venture between the Group and Nippon Marine International S.A., which is a subsidiary of Nippon Steel & Sumikin Engineering Co., Ltd. (Page 132 of the prospectus)

The submersible launch floatover barge, POSH Mogami, was valued at US$25 mln, the costliest barge among the 20 barges within its fleet of 75 vessels.

It was also one of the youngest barges, built in 2012.

The prospectus says it maintains Hull and machinery policy which covers accidental physical loss or damage to its vessels. (Page 138 of the prospectus)

It also has protection and indemnity policy which covers third party liabilities arising out of our vessels’ operations including contractual obligations of owner to crew, collision with other vessels or with fixed or floating objects and oil pollution.

Where any employees involved in marine based or waterborne related work are not covered by a vessel’s Protection and Indemnity policy, the company says it obtains separate insurance for Workmen’s Compensation and Hospitalisation, Term Life and Personal Accident.

So, what is the bottom line?

Is the vessel insured? And if so, for how much?

Total number of questions in the full story: 7)

We have invited the company to an on-camera interview, and/or to reply to our questions in writing.

At the time of publication we have not received a reply (which is why you are seeing this message).

We will update this article if we do.

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