KUALA LUMPUR (April 3): Malaysia-based company Genting Malaysia Bhd or its special purpose vehicle (SPV) has agreed to purchase the controversial luxury yacht "The Equanimity" for US$126 million.
The gaming company made the offer to the government of Malaysia through the Attorney General's (AG) office on March 28 despite earlier media reports that there were no buyers as the deadline lapsed on Sunday (March 31).
The sale was formalised by High Court judicial commissioner Khadijah Idris today, who allowed the amended request by 1Malaysia Development Bhd (1MDB) and its subsidiaries 1MDB Energy Holdings Ltd and 1MDB Global Investment Ltd along with Malaysian government as the beneficiary.
Genting or its SPV will make the staggered payment to that amount with the first 10% within the next five days and the remainder by April 25.
Lawyer Sitpah Selvaratnam earlier told the court that this was the best offer received to date to the reserve price of US$130 million.
Sitpah, who appeared with lawyers Jeremy Joseph and Ong Chee Kuan, said this is in comparison to the US$110 million offer recorded by its appointed broker Burgess.
"There has been other offers made to Burgess in excess of US$100 million but the offer by Genting is the best received so far," she said.
Throughout the 40-minute proceeding covered by theedgemarkets.com before Khadijah, Sitpah explained at length as to why this was the best offer.
She elaborated that Equanimity was already reaching its fifth year on the sea, and the offer made by Genting was the best considering that a substantial amount would have to be spent on repair and maintenance work, as well as depreciation.
"The value of US$130 million was made in 2018 by our evaluators and as we are in 2019 the vessel may have depreciated and some repairs done to put it out back to sea," she said.
Sitpah said the government has been maintaining the vessel since August 2018 at US$500,000 a month.
She said that Genting's offer was negotiated directly, hence there was no commission fee paid, resulting in savings for the government's coffers.
Khadijah allowed the amendment sought by the plaintiff with regard to the selling price and other requests sought by the plaintiff.
"Order is allowed in terms," she said.
The government was represented by senior federal counsel Alice Loke.
The US$130 million reserve price was first ordered by Khadijah last Dec 13, after the Admiralty Court, which was presided by her, gave ownership of the vessel to 1MDB and its subsidiaries.
The US$130 million price tag was based on Winterbotham's market price evaluation.
On Feb 12 this year, Khadijah allowed a varied court order that allows 1MDB and the government to negotiate directly with potential buyers rather than allowing the sale of the vessel through an agent.
AG Tommy Thomas in a statement following the court proceeding said the sale of the vessel is historic, by any measure.
"It records a high water mark for our judicial system in ensuring market value is secured for a vessel sold through the court process without any discount," he said in the statement.
"The US$126 million is the best received offer over five months from October 2018, when the Equanimity was first put up for sale. The sale is the highest recovery to date by the Malaysian government from the 1MDB scandal," he added.
The AG said as the sale was negotiated directly, it had resulted in US$4.4 million in savings as no agency or commission fees were required to be paid.
Thomas commended the legal team that acted beyond their call of duty, travelling to meet potential buyers in Hong Kong and London, bearing travel costs personally and their efforts were complemented by the prompt and steady cooperation from the court sheriff.
The AG also thanked the Royal Malaysian Navy for providing docking space for the vessel for over five months, free of any charges, and, together with the police, maintaining the security and safety of the vessel.
Thomas said the Malaysian government is appreciative of the offer made by Genting as the Genting group itself owns a shipyard that builds superyachts and operates a luxury yacht chartering division.
For transparency, the AG said a further statement will be issued once the purchase price is received with the breakdown in expenses incurred and the net amount to be credited to the newly opened 1MDB recovery account.
The US$250 million vessel said to be owned by Low Taek Jho — also known as Jho Low, off 1MDB funds, was first seized by Indonesia and handed to Malaysia last August.