Ezion enters into contract for charter, disposal of vessel

A unit of troubled liftboat operator Ezion Holdings has entered into a 24-month bareboat charter, with an obligation to purchase (BBC), to dispose of a vessel to buyer April Pearl.

April Pearl - a subsidiary of JUB Pacific - will eventually purchase the liftboat, Teras Conquest 1, for a minimum consideration of US$11.35 million and a maximum consideration of US$11.5 million, minus the deposit, monthly payments and any amounts payable and paid by April Pearl.

Singapore-incorporated JUB Pacific is a liftboat operator with a focus on the renewable space, primarily in Asia's wind farm sector.

Based on the minimum and maximum consideration, the gain estimated from the disposal is about US$3.77 million and US$3.84 million respectively, after transaction costs.

The net loss generated by the vessel for the six-month period ended June 30, 2021 is around US$1.41 million.

Ezion said in a filing to the Singapore Exchange: "The consideration received from the disposal will be utilised to reduce its outstanding liabilities via the partial repayment of its loans. The mortgage over the vessel will be discharged, pursuant to the disposal."

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Assuming that the disposal had been effected on Jan 1, 2020, the basic loss per share and diluted loss per share of the group for the year ended Dec, 31 2020 will decrease from a loss per share of 13.55 US cents to 13.45 US cents and 13.45 US cents, based on the minimum and the maximum consideration respectively.

The BBC was executed by Caterpillar Financial Services Asia as attorney-in-fact of Ezion's subsidiary, in line with powers of attorney granted to Caterpillar as mortgagee under certain financing agreements relating to the vessel.

Trading of Ezion shares had been suspended since early 2019.