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(i) whether the Joint Venture Agreement between the Company and PPL Holdings is premised on equal shareholding and continues to apply in its entirety despite the Company’s ownership in PPL Shipyard Pte Ltd (PPLS) being raised from 50% to 85%; (ii) whether the Company was entitled to terminate the Joint Venture Agreement due to a breach by PPL Holdings and (iii) certain resolutions and orders which are consequential on the findings relating to (i) and (ii) The Court of Appeal in its judgment today ruled that certain provisions in the Joint Venture Agreement between Sembcorp Marine and PPL Holdings premised on equal shareholding no longer applied when Sembcorp Marine increased its shareholding from 50% to 85% in PPLS. The Court of Appeal, however, did not agree that Sembcorp Marine had the right to terminate the Joint Venture Agreement. The cross appeal by PPL Holdings, including their claim to the right to appoint the Managing Director, was dismissed entirely. The Court of Appeal also ruled that certain resolutions passed by Sembcorp Marine’s nominated PPLS directors were valid and not in breach of the provisions in the Joint Venture Agreement. The Sembcorp Marine nominated PPLS directors’ removal of Mr. Anthony Aurol as director of PPLS was also upheld to be valid. The Court of Appeal also dismissed PPL Holding’s claim of minority oppression against Sembcorp Marine. Sembcorp Marine is pleased with the outcome. Arising from the favourable decision of the Court of Appeal, Sembcorp Marine will have complete control of PPLS Board. PPLH also lost the right under the Joint Venture Agreement to appoint its nominees to PPLS’s Board. Sembcorp Marine will also have the right to appoint PPLS’s Chairman, Deputy Chairman, Managing Director and Deputy Managing Director. There will be no change in the consolidation of PPLS as an 85%-owned subsidiary of Sembcorp Marine. The Court of Appeal has awarded Sembcorp Marine 90% of its costs of its appeal and 90% of its costs before the High Court. Sembcorp Marine was also awarded its costs of defending the cross appeal by PPL Holdings. The above is not expected to have any material impact on the net tangible assets and earnings per share of Sembcorp Marine for the year ending December 31, 2013 Sembcorp Marine press release |
The Court of Appeal Rules in Favour