United Global to form JV with Latitude Shipping

LUBRICANT manufacturer United Global's wholly-owned subsidiary United Supply Chain (USC) has formed a joint venture (JV) company with Latitude Shipping, in which USC owns a 45 per cent stake and Latitude Shipping, the remaining 55 per cent.

The issued and paid-up share capital of the JV company Latitude United Shipping will subsequently be increased from US$100 to US$4.5 million.

Latitude Shipping is a private limited company incorporated in Singapore, engaged in the business of providing maritime transport and other shipping-related services.

The JV company, in turn, is acquiring Latitude Shipping's 49 per cent stake in Indonesia-based maritime-transport service provider, PT Latitude Inti Mitra Abadi (PT LIMA) for about US$3.8 million. Of this, approximately US$2.5 million will be satisfied by the issuance of some 2.5 million new shares in the JV to Latitude Shipping; the balance of approximately US$1.3 million will be paid in cash.

The other remaining 51 per cent of PT LIMA is held by another Indonesian company, PT Pelayaran Inti Sejahtera Maju (PT PISM), which the group's non-executive chairman Edy Wiranto, has an aggregate effective interest of 86.01 per cent.

The objective of the JV is to purchase the 49 per cent equity stake in PT LIMA currently owned and held by Latitude Shipping, and, in conjunction with PT PISM, to operate the maritime-transport business in Indonesia and elsewhere in South-east Asia through PT LIMA.

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On the JV, Jacky Tan, chief executive of United Global said: "On one hand, we will be able to gain access to Latitude Shipping's expertise and experience in the maritime-transport sector; on the other hand, Latitude Shipping will be able to tap United Global's connections to business opportunities in Singapore, Indonesia and the region."

He added that this move will enable the group to diversify revenue streams, expand into other businesses, and seize new growth opportunities in other industries.

United Global's shares closed flat at S$0.41 at the end of trading on Tuesday.