Samudera Shipping completes disposal of Indonesian vessel

Martinus Job - , 24/12/2017, 09:57

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The Board wishes to announce that the Group has completed the disposal of Sinar Panjang in accordance with the terms of the Disposal Mandate. Sinar Panjang is a 12 years old Indonesia flagged container vessel. The memorandum of agreement for the sale of Sinar Panjang was executed between PTSSS and an unrelated third party. The consideration for the sale of Sinar Panjang was US$1.2785 million, which was arrived at on a willing buyer-willing seller basis.


The Company has received the full purchase consideration for the sale of Sinar Panjang which was paid in the following manner:


(a) 10% of the purchase consideration was paid to the Group as down payment following the signing of memorandum of agreement; and
(b) the remaining 90% of the purchase consideration was paid upon delivery of Sinar Panjang in the fourth quarter 2017. As committed by the Company in the Circular, the sale price of Sinar Panjang is not lower than 90% of the value of Sinar Panjang as determined by the independent valuer.


DISPOSAL PROCEEDS
The proceeds from the disposal of the vessel will be utilized for working capital and business expansion of the Group. The book value of the vessel is US$1.2 million. Accordingly, the disposal of the vessel results in the Group recording a net loss of US$23,000 (after taking into consideration costs to sell).


PRINCIPLE TERMS OF DISPOSAL
The memorandums of agreement for the sale of Sinar Panjang were based the SALEFORM 1993 (revised 1966, 1983 and 1986/87) prescribed by the Norwegian Shipbrokers’ Association for sale and purchase of vessels and adopted by the Baltic and International Maritime Council in 1956 with modification to cater for the specific sale of Sinar Panjang.


As disclosed in the Circular, under the current Indonesian shipping law, the Group is restricted from owning and registering new Indonesia flagged vessels. Arising therefrom, the Group will not be able to acquire new Indonesia flagged vessel to rejuvenate aging and/or non-competitive Indonesia flagged vessels. The Group has adopted the strategic approach of gradually selling or scrapping Indonesia flagged vessel. Once all the Indonesia flagged vessels are sold/scrapped, the Group will cease to provide shipping services for domestic route within Indonesia. However, the Group will continue to provide shipping services for international route from and to Indonesia as well as potentially investing in a minority stake in Indonesian company which provides shipping services for domestic route within Indonesia. Sinar Panjang was making losses in FY2016.


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