The Board of Directors of FSL Trust Management Pte. Ltd., as trustee-manager of First Ship Lease Trust, refers to its announcement dated 1 June 2022 and further announces that the disposal of the vessel FSL Hong Kong has been completed with the successful delivery of the Vessel to the new owners Hanwang (Hongkong) Trade Co., Limited., an unaffiliated third party, on 17 June 2022.
The gross consideration paid by the Buyer for the Vessel upon delivery was US$19.5 million, which was arrived at after arm’s lengths negotiations between FSL-23 Pte. Ltd., the subsidiary of the Trust that owned the Vessel, and the Buyer on a “willing buyer willing seller” basis.
Having taken into consideration the prevailing and expected charter market environment and earnings prospects for the Vessel, the capital expenditure for the upcoming dry-docking for special survey of the Vessel and the installation of a mandatory ballast water treatment system, (new) environmental regulations, the Vessel’s expected economic life and residual value, and the supply and demand for vessels of the same type and with similar specifications in the sale and purchase market, the Board concluded that the Disposal would be value accretive and more beneficial to the Trust and its unitholders than keeping the Vessel in the portfolio of the Trust.
In determining the adequacy of the gross consideration for the Disposal, the Trustee-Manager also took into account the valuation of the Vessel which it obtained from a reputable, independent third party shipbroker who valued the Vessel at US$19.0 million on the basis of a charter free sale with prompt delivery between a willing seller and a willing buyer, as at the valuation date 9 May 2022.
The valuation report is available for inspection during normal business hours at the registered office of the Trustee-Manager by prior appointment only for 3 months from the date of this announcement. The net book value and the net tangible asset (“NTA”) value of the Vessel upon Disposal was approximately US$16.8 million (unaudited). After taking into consideration the cost of the Disposal (including brokerage commissions and legal fees), the Trust realised a net gain of approximately US$1.9 million (unaudited) and net sales proceeds of approximately US$18.7 million (unaudited), which are intended to be used for general corporate purposes of the Trust.