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PSL Holdings signs term sheet to settle long-running dispute
THE board of PSL Holdings announced that it has signed a binding term sheet on Apr 18, 2018 with several parties to settle a long-running dispute dating back to the middle of 2016.
According to an exchange filing, the logistics and support services company will, among other things, come into possession of seven vessels valued at S$17.95 million, transferred by Indonesian marine logistics services company PT Momentum Indonesia Investama (PT MII), a key player in the saga.
PT MII's director, Sudirman Kurniawan, and independent third-party Angelo Fernandus will also collectively fork out US$4.5 million to PSL.
In addition, the parties involved in the dispute have also agreed to resolve all outstanding disputes related to PT MII.
The dispute between PSL and PT MII began in August 2016 when PT MII's director, Mr Kurniawan, filed an application in Indonesia against PSL seeking to make null and void certain clauses of the sale and purchase agreement (SPA) related to PSL's right to appoint directors to PT MII's board, as well as seek related damages.
The Singapore group had previously acquired a 49 per cent stake in PT MII from Mr Kurniawan and Mr Fernandus, which was approved by shareholders and completed on Nov 25, 2015.
PSL's former CEO Mark Zhou and former group financial controller Natalie Koh were appointed directors representing the group on PT MII's board. They resigned on Aug 12, 2016 and July 29, 2016, respectively, and PSL requested a change of the nominee directors on PT MII's board but was resisted by Mr Kurniawan.
The result of this was that it could no longer recognise PT MII as its subsidiary and would need to reclassify PT MII as an investment instead, PSL said at the time.
PSL countered with a suit of its own in the Singapore High Court on Nov 22, 2016, claiming against Mr Kurniawan and Mr Fernandus for the recovery of sums under the earlier SPA and under a guarantee provided by them.
According to the terms of the SPA, both Mr Kurniawan and Mr Fernandus gave a profit guarantee that PT MII will achieve an aggregate profit of some S$17.3 million over a 24-month period, commencing from November 2015 following the completion of the acquisition.
However, PT MII could only cough up S$5.89 million, and PSL's lawyers demanded profit of S$4.07 million from both vendors.
According to the binding term sheet signed on Wednesday, PT MII will deliver original copies of the title deeds of the seven vessels within 14 calendar days to PSL's lawyers, who will then hold them in escrow until shareholder approval, and also terminate all charter agreements the vessels are subject to.
PSL also announced it has fully de-consolidated PT MII from its marine logistics segment and has re-classified its investment in PT MII as an "available-for-sale" asset with effect from Jan 1, 2017.
"It is PSL's view that a prolonged PT MII dispute is undesirable and that the completion of the vessels transfer and the other transactions contemplated in the term sheet will put an end to the PT MII dispute and obviate the need for the company to expend costly resources and enormous unproductive time on the resolution of the same," PSL said in its exchange filing.
"In the same vein, the vessels transfer would also augment PSL's ability to develop its business in its marine logistics segment," PSL said.
PSL Holdings has been on the Singapore Exchange's watch list since June 5, 2017, after announcing pre-tax losses for three consecutive financial years, based on audited full-year consolidated accounts.
The group will have to take steps to restore its financial health and meet listing requirements within 36 months from June 5, 2017, failing which it would be delisted from the mainboard or have its shares suspended from trading, with a potential delisting thereafter.
Its counter last traded on Wednesday, ending the day at S$0.24 apiece.
Clarification note: PSL wishes to clarify that the parties involved in the dispute in which the binding term sheet for the proposed settlement was entered into includes Mr Sudirman Kurniawan, Mr Angelo Fernandus, PT Selaras Sukses Selalu, PT Triputra Senamustrika and PT Momentum Indonesia Investama (PT MII). In addition, PSL clarifies it was former management who struck a deal to acquire a 49 per cent stake in PT MII, and does not reflect the stance and views of current management on the acquisition and subsequent developments. PSL also wishes to clarify the resignations of former chief executive Mark Zhou and former group financial controller Natalie Koh both took place without any formal approval from PSL's board.