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Mercator sells dry bulk arm Mercator Lines (Singapore) for only $2.20

Mercator sells dry bulk arm Mercator Lines (Singapore) for only $2.20
Dry bulk shipowner Mercator Lines (Singapore) Ltd (MLS) will be sold for a token SGD3 ($2.20) by its parent Mercator International to a group of three private equity firms.

Mercator announced in a statement to the National Stock Exchange of India that it has entered into a sale and purchase agreement to sell the entire stake of 900,850,000 shares of MLS to Bellerophon Holdings Pte Ltd Singapore, MIB Investments Private Limited Singapore, and Wroclaw Holdings Limited Singapore.

The three investment firms will pay SGD1 each for an equal share of MLS, once the sale is approved by Mercator’s board of directors and the Singapore Exchange, where MLS is listed.

“The proposed sale is not a related party transaction,” Mercator stated, adding that “it is not a slump sale.”

The proposed transaction, expected to be completed by 25 March 2016, will effectively allow Mercator to write-off MLS’s debts of around $164m.

For the last financial year ended 31 March 2015, MLS made a loss of $126m and generated a revenue of $56.3m which contributed to about 11% of the consolidated turnover of Mercator. The net worth of MLS as on that date was $180m, representing about 48% consolidated turnover of the group.

MLS was placed under judicial management on 18 January this year following an application to the Singapore courts by creditor HSH Nordbank.

In late January, the judicial manager sold five of MLS bulk carriers for a total of $32.26m to pay back some of the debts to the creditors.