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Pan United to exit shipowning with sale of tug and barge business

Pan United to exit shipowning with sale of tug and barge business
Singapore-listed Pan United Corp is exiting shipowning selling its tug and barge business to a private owned by its controlling family shareholders.

Pan United said that it had entered into a sale and purchase agreement with Sedgefield Corp to sell its tug and barge business for SGD29.92m (21.84m). The company owns 12 tugboats and 10 barges with an average age of eight years.

Sedgefield is private company owned by Jane Kimberly Ng Bee Kiok , Ng Bee Bee and Ng Han Whatt, who are controlling shareholders of Pan United.

Explaining the rationale for the sale Pan United said: The shipping industry has been faced with numerous headwinds in recent years, characterised by an oversupply in vessel capacity and lacklustre demand. These negative factors have resulted in a severe erosion of freight rates.

“As a result, the tug and barge business has been incurring losses since 2013, and most recently recorded an aggregate net loss of SGD4.1m for the half-year ended 30 June 2016.”

Pan United’s shipping division will become an “asset light” business providing logistics, ship chartering and agency services. The company said the move allow it to better focus on its cement and concrete and port businesses.