Seroja Investments sells operating business for US$32m to become cash company

Seroja Investments on Thursday said it has agreed to sell to the group's executive director and chief operating officer Masdjan its entire operating business in Trans LK Marine and its assets for US$32.2 million.

With this, the company will cease to have any operating business and will be deemed as a cash company. It said it will continue to provide updates on the matter soon.

The business for sale involves the provision of marine transportation of drybulk freight, including the provision of chartering services of tugboats and barges mostly to transport dry bulk freight, comprising thermal coal, sand, and other quarry materials.

Based on the latest audited consolidated financial statements for FY18, the book value of the business and assets was about US$27.6 million, putting the consideration at about S$4.5 million in excess over the book value. Seroja expects to reap this as a profit on the proposed disposal.

"The company is of the view that the consideration...is attractive. This translates to S$0.1142 per share which is a 278 per cent premium over the volume weighted average price of the shares of the company of S$0.0302 on 8 August 2019, being the last market day when the shares were traded preceding the date of the sale and purchase agreement...

"The directors are of the view that the disposal presents a good opportunity to unlock value for the shareholders and is in the best interests of the company and shareholders after taking into consideration the financial position and business prospect of Trans LK Marine and its subsidiaries."

The company will receive net proceeds of about US$32 million after deducting all costs and expenses.

"With a strong balance sheet, the company will be able to source for investment opportunities that will provide sustainable long term growth for the company and generate value for the shareholders," it said.

It plans to use proceeds to acquire new assets or businesses to satisfy the listing requirements of the Singapore Exchange.

The proposed disposal to subject to independent shareholders' approval at an extraordinary general meeting to be convened. Masdjan and his associates must abstain from voting, given that this is a interested person transaction.

The company will also be appointing an independent financial adviser to provide an opinion as to whether the disposal is on normal commercial terms and not prejudicial to the interests of the company and its minority shareholders.