This article first appeared in The Edge Financial Daily on April 4, 2019

KUALA LUMPUR: Genting Malaysia Bhd, or its special purpose vehicle (SPV), has agreed to purchase the controversial luxury yacht Equanimity for US$126 million (RM514.39 million).

The casino operator made the offer to the government through the Attorney-General’s (AG) Office last Thursday, in contrast to 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 yesterday, 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 towards that amount with the first 10% within the next five days and the remainder by April 25.

Lawyer Sitpah Selvaratnam 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 with 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 proceedings 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 seas, 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, 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.