KUALA LUMPUR (Dec 23): Boustead Heavy Industries Corp Bhd (BHIC) is disposing of three chemical tankers to Jasa Merin (Labuan) Plc for a combined US$17.1 million (RM73.47 million) or US$5.7 million (RM24.49 million) each.

BHIC said it plans to use the sale proceeds to further reduce its existing loan and borrowings.

In a filing with Bursa Malaysia today, BHIC said its wholly-owned subsidiaries — BHIC Marine Carriers Sdn Bhd, BHIC Marine Ventures Sdn Bhd, and BHIC Marine Transport Sdn Bhd — have signed separate memoranda of agreement with Jasa Merin (Labuan) for the proposed sale.

Jasa Merin (Labuan) is a wholly-owned subsidiary of Jasa Merin (M) Sdn Bhd, which in turn is 70% owned by Silk Holdings Bhd.

The three 7,000-tonne tankers comprised Chulan 1, Chulan 2, and Chulan 3. The vessels were built in 2011 and are currently in active operation.

BHIC said the disposal is in line with its restructuring and rationalisation exercise, which aims to focus its activities on shipbuilding, ship repair, and oil and gas (O&G) activities.

"The proposed disposal is expected to result in a net loss of RM12 million to BHIC Group for the financial year ending Dec 31, 2015," it added.

Barring any unforeseen circumstances, the proposed sale of the vessels is expected to be completed by Feb 29, 2016.

In a separate filing, Silk Holdings said the acquisition of the three tankers offers an opportunity to diversify into other marine and O&G related business, specifically the downstream segment of the O&G industry.

"The vessels to be acquired are expected to be delivered by end (of) February 2016," said Silk Holdings.

It will fund the purchase consideration through a combination of internal funds and borrowings.

"It is anticipated that the vessels under the contracts will contribute positively to group's future earnings once deployed," said Silk Holdings.

BHIC shares closed unchanged at RM2 today, valuing it at RM496.9 million, while Silk Holdings ended the day unchanged at 41.5 sen, giving it a market capitalisation of RM291.1 million.

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