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Raffles Marine, an indirect wholly-owned subsidiary of the Company, is a company incorporated in Panama with limited liability and is principally engaged in the provision of marine transportation services. The Disposal constitutes a discloseable transaction of the Company under Rule 14.06(2) of the Listing Rules. MOA Date: 18 January 2012 Parties: (1) Vendor : Raffles Marine Corp. (2) Purchaser : Long Hill Capital Ltd. To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, Long Hill and its ultimate beneficial owner(s) are third parties independent of the Company and connected persons of the Company. Asset to be disposed: Pursuant to the MOA, Long Hill has agreed to acquire and Raffles Marine has agreed to sell MV Raffles, which is a handysize vessel with carrying capacity of approximately 38,000 dwt and beneficially owned by Raffles Marine. Consideration: The total cash consideration for the Disposal is US$3,090,824.88 (equivalent to approximately HK$24,108,434.06) and shall be payable by Long Hill to Raffles Marine in the following manner: (1) a deposit of 20% of the Consideration shall be lodged in bank account nominated by Raffles Marine within 24 hours after signing of the MOA; and (2) the balance of the Consideration shall be paid to Raffles Marine within 24 hours after the notice of readiness has been tendered by Raffles Marine. The Consideration was arrived at after arm’s length negotiations between Long Hill and Raffles 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 Raffles is to be delivered between 19 January 2012 and 5 February 2012 and Long Hill has an option to cancel the MOA if delivery of MV Raffles shall not take place by 5 February 2012. Completion takes place within 24 hours after receipt of the balance of Consideration by Raffles Marine, whereupon Raffles Marine shall procure physical delivery of MV Raffles and documents relating to the Disposal to Long Hill. The Directors currently expect that the Completion and delivery of MV Raffles will take place on or about 20 January 2012. Upon Completion, the Group will not hold any interests in MV Raffles. INFORMATION ON LONG HILL To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, Long Hill is a company incorporated in the British Virgin Islands with limited liability and is principally engaged in the business of scrapyard. INFORMATION ON MV RAFFLES MV Raffles is a handysize vessel with carrying capacity of approximately 38,000 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 2004 at purchase cost of US$10,700,000.00 (equivalent to approximately HK$83,460,000.00). MV Raffles is free from all encumbrances, mortgages, taxes, maritime liens and debts whatsoever. According to the unaudited management accounts of Raffles Marine, the unaudited net asset value of MV Raffles as at 30 September 2011 was approximately US$5,088,000.00 (equivalent to approximately HK$39,686,400.00). According to unaudited management accounts of the Group for the year ended 31 December 2011 , the net loss before taxation and extraordinary items and the net loss after taxation and extraordinary items attributable to MV Raffles were approximately US$1,792,000.00 and US$1,792,000.00 respectively (equivalent to approximately HK$13,977,600.00 and HK$13,977,600.00 respectively). According to audited accounts of the Group for the year ended 31 December 2010, the net profits before taxation and extraordinary items and the net profits after taxation and extraordinary items attributable to MV Raffles were approximately US$1,878,000.00 and US$1,878,000.00 respectively (equivalent to approximately HK$14,648,400.00 and HK$14,648,400.00 respectively). 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 vessels when suitable opportunities arise. 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$3,090,824.88 (equivalent to approximately HK$24,108,434.06). The net proceeds of the Disposal of approximately US$3,014,000.00 (equivalent to approximately HK$23,509,200.00), after deducting the related expenses paid by the Company in a sum of approximately US$76,824.88 (equivalent to approximately HK$599,234.06), will be used for general working capital of the Group and if the right opportunity arises in future, such proceeds can also be used for the acquisition of further vessels. FINANCIAL EFFECTS OF THE DISPOSAL Subject to audit, it is estimated that the Group will record a loss on the Disposal of approximately US$2,074,000.00 (equivalent to approximately HK$16,177,200.00) for the year ending 31 December 2012, which will be reflected in the consolidated profit and loss account of the Group for the year ending 31 December 2012. The loss on the Disposal is calculated by the net proceeds of approximately US$3,014,000.00 (equivalent to approximately HK$23,509,200.00) arising from the Disposal less the book value of MV Raffles of approximately US$5,088,000.00 as at 30 September 2011 (equivalent to approximately HK$39,686,400.00). 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 2012, it is estimated that the Disposal would not have a material impact on the Group’s financial position/performance. LISTING RULES IMPLICATION The Disposal constitutes a discloseable transaction of the Company under Rule 14.06(2) of the Listing Rules. Courage Marine Group Limited press release |
Discloseable Transaction