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RNS - AGREEMENT SIGNED - DISPOSAL OF A VESSEL - Attachment: jst-release 04072025 final.pdf

Company: Jinhui Shipping and Transport Ltd. Date: 2025-07-04 Language: Norwegian Register to download
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# **JIN - DISPOSAL OF A VESSEL**

The Board of Jinhui Shipping and Transportation Limited announces that a wholly-owned subsidiary of the Company entered into a memorandum of agreement on 4 July 2025 for the disposal of a Supramax at a consideration of US\$10,800,000.

final

# **THE DISPOSAL**

The Vendor entered into the Agreement with the Purchaser on 4 July 2025 for the disposal of the Vessel at a consideration of US\$10,800,000. The Vessel will be delivered by the Vendor to the Purchaser between 7 July 2025 and 15 August 2025.

### **Information on the Group and the Vendor**

The principal activity of the Company is investment holding and the principal activities of its subsidiaries are international ship chartering and ship owning.

The Vendor is a ship owning company and a wholly-owned subsidiary of the Company as at date of this announcement.

# **Purchaser**

The Purchaser is a company incorporated in Singapore and its principal activities are vessel owning and chartering.

To the best of the Board's knowledge, information and belief having made all reasonable enquiry, the Purchaser is an independent third party not connected with the directors, chief executive or substantial shareholders of the Company or its subsidiaries or any of their respective associates.

### **Consideration**

Under the Agreement, the Vendor agrees to dispose of the Vessel for a consideration of US\$10,800,000 payable by the Purchaser on the delivery of the Vessel which will take place between 7 July 2025 and 15 August 2025.

The consideration of the Vessel will be payable by the Purchaser by cash in United States Dollars. The consideration of the Vessel was determined by reference to market intelligence the Company has gathered from shipbrokers and its own analysis of recently concluded sale and purchase transactions of vessels of comparable size and year of built in the market, valuation from independent valuer and on the basis of arm's length negotiations with the Purchaser.

In the course of negotiating the consideration of the Vessel, the Group has obtained indicative valuation of the Vessel from Arrow Valuations, an independent valuer and an affiliate of Arrow Asia Shipbrokers Ltd., an independent shipbroking group. The appraised value of the Vessel from Arrow Valuations was US\$10,800,000 as at 2 July 2025. The market approach has been adopted in the valuation of the Vessel. In the process of gathering the market intelligence from shipbrokers, we receive market information on the sale and purchase market of second hand vessels on a daily basis from international shipbrokers. We also discuss with international shipbrokers frequently to gather market intelligence on what vessels are being put on the market for sale and purchase, which parties are looking to buy or sell their vessels on a worldwide basis. However, as each vessel is never identical, management has based on the experiences, market knowledge to consider and come up with the acceptance of the offer.

As the Vessel is currently engaged under a time charter until September 2025, the Vendor and the Purchaser entered into a bareboat charter agreement simultaneously on 4 July 2025. Pursuant to this bareboat charter agreement, the Purchaser agreed to lease the Vessel to the Vendor for a period of four to six months, commencing upon the completion of the Vessel's delivery under the Disposal until the Vessel is redelivered under free charter to the Purchaser.

#### **Vessel**

The Vessel is a Supramax of deadweight 56,927 metric tonnes, built in year 2009 and registered in Hong Kong. The Vendor is a special purpose company for holding solely the Vessel.

The Vessel has been owned by the Group since year 2009, and its unaudited net book value as at 31 May 2025 was approximately US\$11,746,000. The net profit both before and after taxation and extraordinary items attributable to the Vendor for the financial year ended 31 December 2024 was approximately US\$1,224,000 whereas the net loss both before and after taxation and extraordinary items attributable to the Vendor for the financial year ended 31 December 2023 was approximately US\$2,721,000.

# **Possible financial effects of the Disposal**

The unaudited net book value of the Vessel as at 31 May 2025 as described above, the Group would realize a book loss of approximately US\$0.9 million on disposal of the Vessel. The actual book loss which the Group would realize upon completion of the Disposal will depend on the actual net book value of the Vessel as at date of delivery in accordance with the Group's impairment and depreciation policy for its vessels as shown in the Company's annual report and the actual costs of disposal being incurred of the Vessel as at date of delivery.

#### **Use of proceeds**

The Group intends to keep all net sale proceeds received as general working capital of the Group.

#### **REASONS FOR THE DISPOSAL**

The Group's principal activities are international ship chartering and ship owning. The Directors continuously review the prevailing market conditions of the shipping industry and monitor and adjust the Group's fleet profile as appropriate. The Directors consider that the Disposal represents an opportunity for the Group to readjust its fleet profile and reduce our operational risk exposures in current high-risk volatile markets and the Disposal will enable the Group to enhance its working capital position and further strengthen its liquidity and overall financial position.

The Group operates a balanced and diversified fleet of dry bulk carriers, comprising Capesize, Panamax, Ultramax and Supramax bulk carriers. To stay competitive in the market, the Group focused on enhancing the quality of our fleet and adjusting our fleet profile, in particularly in terms of seeking to lower the overall age profile of our fleet. We try to strike as good as possible, the balance of additional maintenance costs that is associated with the aging of a vessel, the expected revenue generating ability and cargo flexibility when compared to younger vessels, the potential asset value appreciation of an asset, as well as the importance of ensuring we are financially nimble by monetizing suitable assets. We believe in being prepared at all times for future possible opportunities of redeployment of capital into other more suitable assets that may arise going forward while keeping leverage at comfortable levels. We will continuously monitor the market as well as our operations going forward and look out for opportunities to maintain a reasonably modern and competitive fleet, not ruling out any future disposal of smaller and older vessels and replace with newer vessels with larger carrying capacity and longer asset lives or charter-in of vessels. We will make such decisions on an ad hoc basis to maintain high financial flexibility and operational competitiveness.

The Group currently operates a fleet of thirty one vessels, of which twenty four are owned vessels (including the Vessel) and seven are chartered-in vessels, with total deadweight carrying capacity of approximately 2.3 million metric tonnes.

The Directors believe that the Disposal will not have any material adverse effect on the operations of the Group.

The Directors consider the terms and conditions of the Agreement were concluded and agreed between parties on normal commercial terms following arm's length negotiations with reference to the prevailing market values. The terms and conditions are fair and reasonable and believe that the Disposal is in the interests of the Company and its shareholders as a whole.

#### **DEFINITIONS**

In this announcement, unless the context requires otherwise, the following expressions of the following meanings were used:

| "Agreement" | the memorandum of agreement dated 4 July<br>2025<br>entered into between<br>the Vendor and the Purchaser in respect of the<br>disposal<br>of the Vessel; |
|-------------|----------------------------------------------------------------------------------------------------------------------------------------------------------|
| "Board"     | the board of Directors;                                                                                                                                  |
| "Company"   | Jinhui Shipping and Transportation Limited;                                                                                                              |
| "Directors" | the directors of the Company;                                                                                                                            |
| "Disposal"  | the disposal<br>of the Vessel under the Agreement;                                                                                                       |
| "Group"     | the Company and its subsidiaries;                                                                                                                        |
| "Hong Kong" | the Hong Kong Special Administrative Region of the People's<br>Republic of China;                                                                        |
| "Purchaser" | Huwell Shipping Pte. Ltd., a company incorporated in Singapore;                                                                                          |
| "Vendor"    | Jingang<br>Marine<br>Inc., a wholly-owned subsidiary of<br>the Company;<br>and                                                                           |
| "Vessel"    | a deadweight 56,927<br>metric tonnes bulk carrier "JIN GANG"<br>registered in Hong Kong.                                                                 |

By Order of the Board

**Ng Kam Wah Thomas** 

*Managing Director*

4 July 2025