Kuala Lumpur: Penang-based MTT Shipping Sdn Bhd (MTTS) has chartered 10 vessels from debt-laden PN17 company Swee Joo Bhd, writes The Star. Swee Joo executive director Allistar Hilton Smith said the fleet comprised seven container ships and three tugboats and barges owned by Swee Joo's subsidiary, Johan Shipping Sdn Bhd.
"These vessels are chartered for two years as part of Swee Joo's proposed restructuring scheme to regularise its financial condition," he told StarBiz yesterday. The charter agreement is to ensure uninterrupted operation of the Swee Joo container vessel chartering business, thus allowing it to focus on addressing its debt problems.
Swee Joo, which owns more than 30 vessels, including four chemical tankers, was classified a PN17 company about four months ago after it defaulted on its loan obligations. The group has total borrowings of some RM466mil. MTTS, a special-purpose vehicle to facilitate the restructuring of Swee Joo group, signed a memorandum of understanding (MoU) with the latter last month.
Swee Joo and MTTS shareholders have agreed that within 30 days from the completion of the proposed restructuring scheme, MTTS will be sold to Swee Joo, which will pay for the acquisition of MTTS via the issuance of new shares.
Under the MoU, MTTS must emerge as a substantial shareholder, owning at least a 30% stake in the Swee Joo group on completion of the proposed restructuring scheme. MTTS group executive chairman is Datuk Dr Kenny Ong Kean Lee, who is also chairman of Evergreen Marine Malaysia, which is 49%-owned by Taiwan's Evergreen Marine Ltd.
Ong also heads the Priority Group of companies which offer total logistics services, including warehousing, multi-modal international freight forwarding, local trucking, container haulage and distribution to local and international multi-national corporations.
Hilton Smith said Johan Shipping had a long working relationship with Evergreen Marine Malaysia as its exclusive agent in Sabah and Sarawak since the 1990?s. "We know each other well and it is a good alliance," he added. He said Swee Joo was now actively working on the proposed regularisation scheme for presentation to its creditors. The company is required to submit its regularisation plan to the Securities Commission by August, 2011.
On Swee Joo's coastal vessel operations within Sarawak, he said it was profitable. "With the oil palm industry doing well, there are a lot of fertiliser to be shipped. Besides, there are many building and raw materials to be transported to cater for development projects within Sarawak Corridor of Renewable Energy," he added.
Hilton Smith said Swee Joo's wholly-owned unit, Asia Bulkers Sdn Bhd, which operates the four chemical tankers, was being restructured. The operation of the tankers, which cost a total US$56mil to build, has stopped pending the outcome of the restructuring exercise. The company was in talks with the lenders and studying options whether to sell the tankers or time charter them, Hilton Smith said. Previously, these tankers transported palm oil products between Malaysia and China, Malaysia and India as well as Indonesia and India. [24/12/10]
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