Courage Marine Group will not be selling a 2011-built Supramax bulk carrier, Zorina, as planned, it said on Monday (5 June).
This follows from an earlier announcement made on 2 May, that the sale could be cancelled in order for the company to remain listed in Hong Kong. Had the transaction gone through, the company would not have a sufficient level of operations or assets of sufficient value to remain listed on the Hong Kong Stock Exchange (HKSE).
The company has a primary listing in Hong Kong and a secondary one in Singapore.
On 8 February, Courage Marine entered into a memorandum of agreement (MoA) to sell Zorina to Universal Ship Investment Corp, an investment-holding company incorporated in Panama, for a consideration of USD7.35 million.
The company had expected to yield net proceeds of about USD7.166 million, less a 2.5% sales commission payable to the broker. This works out to an accounting loss of USD114,000 for the financial year (FY) ended 31 December 2017, against a book value of approximately USD7.28 million as at 31 December 2016.
According to the MoA, the sale must be completed within 90 days after the seller deposits 10% of the consideration, with shareholders’ approval and in compliance with listing rules. In Monday’s announcement, Courage Marine said that the MoA has lapsed as this period is over and “the parties to the MoA could not reach any further agreements”.
Neither party will have any claim against the other for costs, damages, compensation or otherwise, it said.
The 57,000 dwt Zorina is one of the two vessels remaining in Courage Marine’s fleet, the other being Heroic, also a Supramax bulk carrier. According to its FY 2016 annual report, the company recorded a USD10.763 million impairment loss for both vessels, USD20.651 million in FY 2015, and their carrying value was USD14.378 million at the end of the period.
Poor demand for its vessels has led Courage Marine to massively downsize its fleet in recent years, selling or scrapping all its Capesize and Panamax bulk carriers. In FY2015, the company sold Cape Pioneer and Courage, recording a USD5.335 million accounting loss.
The group has also been actively pursuing business opportunities outside of vessel chartering as a buffer against the poor dry bulk freight market. In March 2016 it acquired businesses principally engaged in the provision of logistics, custom clearance, and auxiliary services as well as import and export of goods.
Last month, Courage Marine proposed to change the company name from “Courage Marine Group Limited” to “Courage Investment Group Limited,” to “better reflect the current status of the diversified business scope of the group and its direction of future development”.
Courage Marine describes its principal activities as comprising of marine transportation services, property holding and investment, merchandise trading and investment holding.
The change is subject to shareholders’ vote and approval from the Registrar of Companies in Bermuda, where the company is incorporated.