Freight Management ventures into O&G with Scomi Energy

Freight Management ventures into O&G with Scomi Energy
Business & Markets 2013
Written by Kamarul Anwar of theedgemalaysia.com
Monday, 03 June 2013 18:57


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KUALA LUMPUR (June 3): Logistics firm Freight Management Holdings Bhd (FMHB) is venturing into the oil and gas (O&G) industry under a collaboration with Scomi Energy Services Bhd (SESB)

In a filing with Bursa Malaysia, Freight Management said it has entered into two joint venture (JV) agreements with Scomi Energy to acquire, own and operate marine vessels.

"The JV will provide FMHB and SESB a synergy with their respective principal activities, to jointly acquire, own and operate marine vessels, for the purposes of leasing or chartering the marine vessels to third party in the O&G industry and other industry in South East Asia," FMHB said.

FMHB and SESB will set up two equally-owned JV companies. One is for the acquisition and ownership of marine vessels while the other will undertake the task of operating the transportation entities.

The vessel owner's maiden project is to purchase a tug and barge.

"FMHB and SESB will advance to the vessel owner, a non-interest bearing shareholders’ loan of an aggregate amount of up to thirty per centum (30%) of the purchase price of the vessel or such equity portion as may be required by the financier for the vessel in the proportion of their respective shareholdings in the vessel owner, which will be utilised by the vessel owner to part finance the purchase of the vessel.

"To finance the balance of the purchase price of the vessel, the vessel owner will obtain financing on appropriate and favorable terms to be mutually agreed by the JV with the financial institution," FMHB said.

FMHB said its JV SESB will have no impact to the former's earnings and net tangible assets for financial year ending June 30, 2013.