ASL Marine to sell loss-making Chinese shipyard unit for 35 million yuan

MAINBOARD-LISTED ASL Marine has said that it will dispose of an inactive, loss-making indirect subsidiary in China, which was once involved shipbuilding, to raise working capital.

ASL inked a deal on Monday to sell Jiangmen Hongda Shipyard, which is owned by a 60 per cent unit, to Chinese concrete piles dealer Guangdong Sanhe Pile for 35 million yuan (S$6.96 million) in cash.

Jiangmen Hongda Shipyard has not done any business since 2017, amid a global industry slump, and retains only land and buildings as assets, ASL noted in its announcement.

The sale of the ailing subsidiary, which contributed to about 7.8 per cent of ASL's S$24.7 million net loss in the nine months to March 31, would have pared loss per share from 11.11 Singapore cents to 10.76 Singapore cents on a pro forma basis if done on July 1, 2017, ASL added.

The board said that the planned sale, which is part of an ongoing asset rationalisation to increase working capital, will let the group streamline its structure and reduce fixed operating costs. The deal is expected to yield a gain of about S$8.9 million, not counting professional fees and transaction costs.

Under the sale and purchase agreement, 60 per cent-owned vendor Hongda Investment will still be liable for Jiangmen Hongda Shipyard's operational debts and liabilities, up to a certain limit.

ASL Marine added 0.3 Singapore cent, or 6.52 per cent, to 4.9 Singapore cents, before the news.