Manhattan Resources won't need shareholder approval to sell most of its fleet

MANHATTAN Resources will not need to get shareholders' approval for a subsidiary's disposal of 52 vessels, the board said on Friday, citing a waiver of the requirement from the Singapore Exchange.

It said that it had applied for the waiver because its PT Aneka Samudera Lintas unit, which is trying to sell off almost all of its fleet, has been loss-making for four years.

Also, Manhattan Resources aims to focus more on its mineral resource, property and power plant operations, and will no longer have shipping and barging as its main business, it noted.

"It would be in the interests of the company to complete the proposed disposal as soon as practicable, so that its financial performance does not get adversely affected further," said the board.

It added that the board believed the cost of complying with the requirement for shareholders' approval of the sale would outweigh any resulting protection to shareholders.

But speeding up the completion of the sale would be in the interests of shareholders, because of the gain of some S$10.3 million, the board said.

Manhattan Resources' board also noted that it believed there would be no material change in the risk profile of the group from the vessels' sale, as it will keep two tugs and two barges, and could continue its shipping business either by using its newer, unsold vessels or chartering other newer vessels.

Even though revenue from the group's barging and shipping business was about 39.2 per cent of its FY2017 turnover and 59.4 per cent of its HY2018 income, the sale of the vessels is expected to lead to the disposal of "a substantial portion of a loss-making business segment at a premium to their book value, thereby improving the balance sheet of the group", the board said.