Perdana Petroleum Berhad (PPB) announced that its subsidiary Perdana Mercury Ltd (PML), has on 21 November 2013, agreed to terminate the bareboat charter arrangement with Mount Bintang LLC (Mount Bintang) and Mount Bubu LLC (Mount Bubu) on three vessels, i.e. ‘Perdana Liberty’, ‘Perdana Frontier’ and ‘Perdana Horizon’.
On the same date, Perdana Pluto Ltd (PPL), a wholly-owned subsidiary of PPB, had entered into Memorandum of Agreements with Mount Bintang and Mount Bubu to purchase the vessels for approximately RM50.0 million.
The termination and the purchase will result in the recognition of the vessels as assets of the PPB Group and hence converting the vessels that are foreign flag to Malaysian flag.
The vessels purchase would be funded by internally generated funds and bank borrowings. The PPB Group has secured re-financing facilities of approximately USD34.0 million to part finance the purchase of the vessels.
The termination and the purchase does not have any effect on the issued and paid-up share capital of PPB or the shareholdings of PPB’s substantial shareholders and the net assets per share. It will result in savings in terms of lease rental expense against interest cost and depreciation of about RM10.0 million per year.
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