Falcon Energy unit to sell offices for S$13.2 million to repay UOB

FALCON Energy said on Tuesday that it plans to sell and leaseback five office units in order to repay lender UOB.

The offshore and marine company said that its subsidiary, Longzhu Oilfield Services, had entered into agreements on July 21 for the sale of office premises located at units #33-01/01A/14/15/16 of 10 Anson Road, International Plaza in Singapore.

The sale price is S$13.2 million, and the sale is expected to be completed on Nov 8. The sale will require the approval of shareholders, which will be sought when Falcon Energy hosts its next annual general meeting.

Once the sale is complete, Falcon Energy will enter into four lease agreements for the leaseback of the properties from the purchaser.

The lease term will be 24 months commencing from Nov 9, with an aggregate monthly rent of S$46,030.60 and an option to renew for another 12 months.  

Falcon Energy said: "In the light of the severe and protracted downturn in the global oil and gas industry and the depressed offshore marine and subsea industry, the group considers the disposal to be a strategic decision ... as it will allow (Longzhu Oilfield Services) to repay outstanding amounts under credit facilities granted by UOB."

This will reduce the group's current financial liabilities and borrowings, it added.

Falcon Energy shares fell 2.33 per cent on Tuesday to close at S$0.042.