Beng Kuang Marine has entered into a conditional land sale and purchase agreement to sell 31% of its Batam shipyard property to PT. Bukit Batu Mulia for $9.89 million.
The percentage of the company’s shipyard amounts to some 100,970 sqm.
PT. Bukit Batu Mulia is 51.0% and 49.0% owned by Summit Excellent Enterprises, BVI and George Santos respectively. Summit Excellent Enterprises is associated and affiliated with China’s Nanshan Group, a large-scale private joint-stock enterprise listed in the Chinese Federation of Enterprises (CFE)'s Top 500 Chinese Enterprises. The group is in the business of aluminium processing, fabric and garment manufacturing and processing, real estate, finance, as well as others.
Santos is the founder and owner of the Indonesia Solid Group based out of Batam/Raiu Indonesia and is in the business of mining, shipping, construction, concrete batching, asphalt and stone quarry.
The news comes after Beng Kuang sold around 30% of its Batam shipyard property for $8.64 million in April. The sale was made to a subsidiary of Oil States International, a major global provider of integrated energy systems and solutions.
In its June 23 statement, the company says it has been “prioritising cost minimisation and deleveraging initiatives while focusing on monetising fixed assets and high-potential business segments within its core business divisions to create new growth catalysts”.
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“The cash proceeds from both sale transactions of our Batam shipyard property are expected to significantly boost our liquidity resources. Coupled together with the rest of our deleveraging initiatives, it will allow us to stay nimble and agile in navigating through the current rising interest rate environment,” says Yong Jiunn Run, CEO of Beng Kuang Group.
“More importantly, it provides a stronger financial footing for us to pursue high-growth opportunities within our infrastructure engineering and corrosion prevention business segments where we have an entrenched market position and strong technical competencies,” he adds. “We see good business prospects in the marine and offshore industries and the momentum we gained so far underpins our confidence for the year ahead.”
Beng Kuang was included in the Singapore exchange’s (SGX) watch-list on June 6 after suffering from three consecutive years of losses. The company will have to take active steps to meet the exchange’s requirements of the listing manual within 36 months. The company will be able to apply to be removed from the list if it records consolidated pre-tax profits for their latest financial years in addition to having an average daily market capitalisation of $40 million or more over the past six months.
Shares in Beng Kuang marine last traded at 7.3 cents before its trading halt on the afternoon of June 21.
