STRAITS SUBSIDIARY TO ACQUIRE VESSEL FROM ADAMAS MARINE FOR RM14.55 MLN

KUALA LUMPUR, Oct 18  -- Straits Energy Resources Bhd (Straits) announced that SMF Beluga Ltd (Beluga) had on Oct 15, 2021 entered into a Bareboat Charter Hire Agreement with Adamas Marine Sdn Bhd to acquire a vessel, named MT Empower for a purchase consideration of US$3.5 million or equivalent to RM14.55 million.

Beluga is a wholly-owned subsidiary company of Straits Marine Fuels & Energy Sdn Bhd (SMF) which in turn is a 67 per cent owned subsidiary of Straits.

In a filing with Bursa Malaysia today, Straits said it will be satisfied entirely via cash over a period of three years from the date of the agreement.

“The purchase consideration of US$3.5 million was arrived at, on a willing-buyer willing-seller basis, and after taking into consideration the market value of US$4.0 million (market value) as ascribed by the appointed independent registered valuer, namely BMI Appraisals Ltd dated Sept 16, 2021.

“The purchase consideration of vessel of US$3.5 million represents a discount of about 12.5 per cent over the market value as ascribed by the independent registered valuer,” it said, adding that the board deems the negotiated purchase consideration of vessel as reasonable.

Straits said the purchase consideration will be satisfied entirely in cash by Beluga, which will be financed through internally generated funds over the payment period as set out in the announcement.

The company said the proposed acquisition enables Beluga to own a vessel, named Empower, to expand the business of SMF especially in the supply of low sulphur fuel oil (LSFO) market to cater to the increasing demand of LSFO in Malaysia.

“The addition of Empower will enlarge the asset base of Straits and its subsidiary companies (group) and would provide the group with added flexibility in respect of its allocation and utilisation of vessels in undertaking its business activities.

“Based on the foregoing, the board deems the proposed acquisition as favourable for the future performance of the group,” it added.

-- BERNAMA