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Asset to be disposed: Pursuant to the MOA, AII has agreed to acquire and Bravery Marine has agreed to sell MV Bravery, which is a handysize vessel with carrying capacity of approximately 36,000 dwt and beneficially owned by Bravery Marine. Consideration: The total cash consideration for the Disposal is US$3,333,676.50 (equivalent to approximately HK$26,002,676.70) and shall be payable by AII to Bravery Marine in the following manner: (1) a deposit of 20% of the Consideration shall be lodged in bank account provided by Bravery Marine within 24 hours after signing of the MOA; and (2) the balance of the Consideration shall be paid to Bravery Marine within 24 hours after the notice of readiness has been tendered by Bravery Marine and accepted by AII. The Consideration was arrived at after arm’s length negotiations between AII and Bravery Marine with reference to market intelligence the Company has gathered from its own analysis of recently concluded sale and purchase transactions of vessels of comparable size and year of build in the market. The Directors consider the terms and conditions of the Disposal to be fair and reasonable and are in the interests of the Group and the shareholders of the Company as a whole. Delivery and Completion MV Bravery is to be delivered during November 2011 and AII has an option to cancel the MOA if delivery of MV Bravery shall not take place by 30 November 2011 . Completion takes place within 24 hours after receipt of the balance of Consideration by Bravery Marine, whereupon Bravery Marine shall procure physical delivery of MV Bravery and documents relating to the Disposal to AII. The Directors currently expect that the Completion and delivery of MV Bravery will take place on or about 19 November 2011. Upon the Completion, the Group will not hold any interests in MV Bravery. INFORMATION ON AII To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, AII is a company incorporated in the British Virgin Islands with limited liability and is principally engaged in the business of scrapyard. INFORMATION ON MV BRAVERY MV Bravery is a handysize vessel with carrying capacity of approximately 36,000 dwt. Its flag State is Panama and was inspected and classified by China Corporation Register of Shipping for purpose of safety classification society. It was acquired by the Group in 2005 at purchase cost of US$7,850,000 (equivalent to approximately HK$61,230,000). MV Bravery is free from all encumbrances, mortgages, taxes, maritime liens and debts whatsoever. According to the unaudited management accounts of Bravery Marine, the unaudited net asset value of MV Bravery as at 30 September 2011 was approximately US$4,500,000 (equivalent to approximately HK$35,100,000). According to audited accounts of the Group for the year ended 31 December 2010, the net profits (both before and after taxation and extraordinary items) attributable to MV Bravery was approximately US$1,650,000 (equivalent to approximately HK$12,870,000). According to audited accounts of the Group for the year ended 31 December 2009, the net profits (both before and after taxation and extraordinary items) attributable to MV Bravery was approximately US$50,000 (equivalent to approximately HK$390,000). INFORMATION ON THE GROUP The principal activity of the Company is that of an investment holding company and the principal activities of the Group are provision of marine transportation services, property holding, investment holding and provision of administration services. REASONS FOR THE DISPOSAL The Disposal is for demolition and this provides a good opportunity for the Group to generate cash which is intended to be used for general working capital and for funding any future acquisition of further vessel when suitable opportunity arises. The Directors believe that the terms of the MOA are entered into upon normal commercial terms following arm’s length negotiations between the parties and the terms of the MOA are fair and reasonable and are in the interests of the shareholders of the Company as a whole. The sale proceeds of the Disposal is US$3,333,676.50 (equivalent to approximately HK$26,002,676.70). The net proceeds of the Disposal of approximately US$3,200,000 (equivalent to approximately HK$24,960,000), after deducting the related expenses paid by the Company in a sum of approximately US$133,676 (equivalent to approximately HK$1,042,673), will be used for general working capital of the Group and if the right opportunity shall arise in future, such proceeds can also be used for acquisition of further vessel. FINANCIAL EFFECT OF THE DISPOSAL Subject to audit, it is estimated that the Group will record a loss on the Disposal of approximately US$1,300,000 (equivalent to approximately HK$10,140,000) for the year ending 31 December 2011 , which will be reflected in the consolidated profit and loss account of the Group for the year ending 31 December 2011 . The loss on the Disposal is calculated by the net proceeds of approximately US$3,200,000 (equivalent to approximately HK$24,960,000) arising from the Disposal less the book value of MV Bravery of approximately US$4,500,000 as at 30 September 2011 (equivalent to approximately HK$35,100,000). Apart from the loss on the Disposal to be reflected in the consolidated profit and loss account of the Group for the year ending 31 December 2011 , it is estimated that the Disposal would not have a material negative impact on the Group’s financial position/performance. Courage Marine Group Limited press release |
Discloseable Transaction
To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries,
AII and its ultimate beneficial owner(s) are third parties independent of the Company and connected
persons of the Company.