Malaysia-listed Straits Inter Logistics Berhad (SIL), principally engaged in oil trading, bunkering and investment holding activities, on Tuesday (16 February) said Sierra Pioneer Marine Ltd (Sierra), has entered into a Memorandum of Agreement (MOA) with Ocean World Inc (Ocean) to acquire a vessel named M.T. Guo Kang No 1.
Sierra is an investment holding company and a 51% owned subsidiary of Straits Marine Fuels & Energy (SMF) which in turn, is a 67% owned subsidiary of SIL.
Ocean World is a Singaporean owned vessel trading company registered in the British Virgin Islands.
The purchase consideration of the transaction is USD 1.6 million (MYR 6.5 million) to be fulfilled entirely by Sierra via cash financed through internally generated funds, it said.
The purchase consideration of USD1,600,000 was arrived at, on a willing-buyer willing-seller basis, after taking into consideration the market value of M.T. Guo Kang No 1 of USD 1.83 million as ascribed by the appointed independent registered valuer, noted SIL.
The purchase consideration represents a discount of approximately 12.56% over the Market Value which the Board of SIL finds to be reasonable.
The company noted the acquisition will enable Sierra to expand the business of SMF especially in the supply of High Sulphur Fuel Oil (HSFO) market to cater the increasing demand of HSFO in Malaysia.
The addition of M.T. Guo Kang No 1 will enlarge the asset base of Straits and its subsidiary companies and would provide the group with added flexibility in respect of its allocation and utilization of vessels in undertaking its business activities.
At present, Tumpuan Megah operates in eight ports around Malaysia, which include Lumut Port, Pasir Gudang Port, Tanjung Pelepas Port, Johor Bahru Port, Kuantan Port, Kemaman Port, Kuala Terengganu Port and Labuan Port, all of which are licensed under Petroleum Development Act 1974 for its bunkering services. It has an enlarged fleet size of 11 vessels with a total carrying capacity of 22 million litres.
The details of the transaction are as follows:
| Name of vessel | M.T. Guo Kang No.1 |
| Type | Oil tanker |
| International Maritime Organisation (“IMO”) number | 9394492 |
| Flag | Cook Islands |
| Place of Registry | Cook Islands |
| Year of Built | 2006 |
| Age | 15 Years |
| Builder’s name | Guangxi Xijiang Shipyard Co. Ltd |
| Deadweight tonnage | 2,169 tonnes |
| Gross tonnage | 1,432 tonnes |
| Length over all/ Depth/ Breadth (metres) | 57.850 / 5.800 / 15.000 |
| Current use | Provision of oil bunkering services |
Related: Straits Inter Logistics plans private placement to increase stake in Tumpuan Megah
Related: Straits Inter Logistics sees 66% decline in net profit; slight recovery in bunker business
Related: Straits Inter Logistics subsidiary SMF Eden acquires “M.T. MO Satu” bunker tanker for USD 4.5 million
Related: Straits Inter Logistics sees 67.8% fall in Q2 2020 profit due to Covid-19 related impact
Related: Straits Inter Logistics subsidiary Beluga Asia acquires bunker tanker to increase service availability
Related: Straits Inter Logistics IMO 2020 strategies contribute 141.2% jump in revenue for Q1
Photo credit: Straits Inter Logistics Berhad
Published: 17 February, 2021
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