Chinese authorities to compulsorily acquire 13 of Oceanus' abalone farms

THE board of Oceanus Group on Monday said that it has been informed by the Gulei Zhen People's Government in China of the latter's plans to compulsorily acquire 13 of its abalone farms for purposes of urban planning.

The company has received compensation agreements which detail the compensation amount as well as the further steps involved for the completion of the compulsory acquisition.

The gross aggregate compensation amount stated was 182.5 million yuan (S$38 million), subject to adjustments and deductions for various charges and fees.

Oceanus said: "The company will continue to work with its consultants and advisors to minimise the various charges and fees, and maximise the net compensation amount.

"The company intends to utilise the net compensation amount received from the compulsory acquisition to repay the total debt of S$20 million remaining after the completion of the restructuring exercise . . . The balance will be used for general working capital purposes and to fund the company's growth strategies."

Proceeds from the compulsory acquisition are expected to be recognised in the financial year ending Dec 31, 2017.

The acquisition itself will not have a material impact on the company's operations as the company will relocate its existing operations to its farms in Fotan in China, which are adequate for its new business model of focusing on abalone hatchery which requires less farm land, instead of focusing on land-based abalone farming, it said.

The company has requested for its trading halt to be lifted.