The Board of Directors (the “Board”) of FSL Trust Management Pte. Ltd., as trustee-manager (the “Trustee-Manager”) of First Ship Lease Trust (the “Trust”), refers to its announcement dated 1 June 2022 and further announces that the disposal of the vessel FSL Hong Kong (the “Vessel”) has been completed with the successful delivery of the Vessel to the new owners Hanwang (Hongkong) Trade Co., Limited. (the “Buyer”), an unaffiliated third party, on 17 June 2022 (the “Disposal”).
The gross consideration paid by the Buyer for the Vessel upon delivery was US$19.5 million, which was arrived at after arm’s lengths negotiations between FSL-23 Pte. Ltd., the subsidiary of the Trust that owned the Vessel, and the Buyer on a “willing buyer willing seller” basis. Having taken into consideration the prevailing and expected charter market environment and earnings prospects for the Vessel, the capital expenditure for the upcoming dry-docking for special survey of the Vessel and the installation of a mandatory ballast water treatment system, (new) environmental regulations, the Vessel’s expected economic life and residual value, and the supply and demand for vessels of the same type and with similar specifications in the sale and purchase market, the Board concluded that the Disposal would be value accretive and more beneficial to the Trust and its unitholders than keeping the Vessel in the portfolio of the Trust.
In determining the adequacy of the gross consideration for the Disposal, the Trustee-Manager also took into account the valuation of the Vessel which it obtained from a reputable, independent third party shipbroker who valued the Vessel at US$19.0 million on the basis of a charter free sale with prompt delivery between a willing seller and a willing buyer, as at the valuation date 9 May 2022. The valuation report is available for inspection during normal business hours at the registered office of the Trustee-Manager by prior appointment only for 3 months from the date of this announcement. The net book value and the net tangible asset (“NTA”) value of the Vessel upon Disposal was approximately US$16.8 million (unaudited). After taking into consideration the cost of the Disposal (including brokerage commissions and legal fees), the Trust realised a net gain of approximately US$1.9 million (unaudited) and net sales proceeds of approximately US$18.7 million (unaudited), which are intended to be used for general corporate purposes of the Trust.
Based on the last announced unaudited consolidated financial statements of the Trust and its subsidiaries (the “Group”) for the financial period ended 31 March 2022, the relative figures for the Disposal computed on the relevant bases set out in Rule 1006 of the Listing Manual (the “Listing Manual”) of the Singapore Exchange Securities Trading Limited (“SGX-ST”) are as follows:
The pro forma financial effects of the Disposal on the NTA (per unit) as at 31 December 2021, being the most recently completed financial year, and assuming that the Disposal had been effected on 31 December 2021:
The pro forma financial effects of the Disposal on the earnings (per unit) of the Trust as at 31 December 2021, being the most recently completed financial year, and assuming that the Disposal had been effected on 1 January 2021:
No person is proposed to be appointed as a director of the Trustee-Manager in connection with the Disposal and no service contracts in relation thereto have been or are proposed to be entered into by the Trustee-Manager. None of the directors of the Trustee-Manager or controlling unitholders of the Trust has any interest, direct or indirect, in the Disposal, save for their respective unitholdings in the Trust (if any) and/or shareholdings in the Trustee-Manager (if any).
Source: FSL Trust Management PTE. LTD