Scomi Marine cancels decision to sell four companies for RM538.3mil

PETALING JAYA: [url=http://archives.thestar.com.my/search/?q=Scomi Marine Bhd]Scomi Marine Bhd[/url]'s unit, [url=http://archives.thestar.com.my/search/?q=Scomi Marine Services Pte Ltd (SMS)]Scomi Marine Services Pte Ltd (SMS)[/url], has retracted its decision to dispose of four marine logistics companies to SMS' 80.54%-owned [url=http://archives.thestar.com.my/search/?q=PT Rig Tenders Indonesia Tbk (PTRT)]PT Rig Tenders Indonesia Tbk (PTRT)[/url] for 323.1bil rupiah (RM538.3mil) in a group-related corporate exercise.
[url=http://archives.thestar.com.my/search/?q=Scomi Marine]Scomi Marine[/url] told [url=http://archives.thestar.com.my/search/?q=Bursa Malaysia]Bursa Malaysia[/url] yesterday that the period to comply with conditions under the standby purchase agreement had lapsed on March 31, adding that various conditions had also not been met.
To recap, the corporate exercise would have involved its unit SMS selling four companies to PTRT - namely [url=http://archives.thestar.com.my/search/?q=CH Logistics Pte Ltd]CH Logistics Pte Ltd[/url], [url=http://archives.thestar.com.my/search/?q=CH Ship Management Pte Ltd]CH Ship Management Pte Ltd[/url], [url=http://archives.thestar.com.my/search/?q=Grundtvig Marine Pte Ltd]Grundtvig Marine Pte Ltd[/url] and [url=http://archives.thestar.com.my/search/?q=Goldship Private Ltd]Goldship Private Ltd[/url] to PTRT.
The marine logistics company owns and operates 51 vessels, comprising 27 tugs and 24 flat top barges.
Under the exercise, PTRT had planned to undertake a renounceable rights issue to partly fund the “disposal consideration” whereby SMS would undertake to renounce all of its entitlement to [url=http://archives.thestar.com.my/search/?q=Portside Offshore Inc]Portside Offshore Inc[/url] and [url=http://archives.thestar.com.my/search/?q=PT Revessel Indonesia]PT Revessel Indonesia[/url].
Last year, Scomi Marine had announced the sale of a controlling equity in its marine logistics business headlined by PTRT to Portside Offshore Inc, a company that is controlled by an Indonesian private fund.
At the time, Scomi had said that the business environment for the marine logistics and offshore support vessel businesses in Indonesia was increasingly challenging amid changes in local regulations relating to ownership, intensifying competition and pressures on charter rates.
In addition, significant capital expenditure outlay was expected to be incurred to replace vessels and to invest in new business opportunities, it had said.
In its note to Bursa yesterday, Scomi Marine said that after due deliberation, SMS, Portside and PTRT had entered into the deed of mutual termination, discharge and release to mutually terminate the agreement.
Scomi Marine added that it would nevertheless continue and endeavour to talk to other suitable strategic investors to undertake similar proposals, in line with the group's strategic plans.
Scomi Marine [url=http://archives.thestar.com.my/search/?q=Mukhnizam Mahmud]president Mukhnizam Mahmud[/url] said in a statement: “Our strategic plans to reduce our shareholding in PTRT, will enable PTRT to comply with the cabotage laws in Indonesia and tap into the growing demand for Indonesian- flagged vessels