KUCHING: Sarawak Oil Palms Bhd’s (SOP) wholly-owned subsidiary Asia Oils Investment Ptd Ltd (AOIPL) has subscribed for shares worth US$4.625 million in a Singapore-based company, Seaworth Pte Ltd.
The share subscription is to enable the SOP group to participate in the shipping business and to provide logistical support to the group’s palm oil business.
On Oct 22, 2019, AOIPL subscribed 4.625 million non-cumulative and non-convertible preference shares of US$1 each in Seaworth, which was incorporated on Jan 23, 2019.
Seaworth’s shareholders are JJ Rhema Pte Ltd and AOPIA, each holding 50 percent equity interest in the joint-venture company, which has a share capital of US$8 million.
The subscription of shares’ consideration of US$1 was arrived at the mutual agreement between the shareholders as working capital for Seaworth, SOP said in a filing with Bursa Malaysia.
The directors of Seaworth are Tan Sri Ling Chiong Ho, Wong Hee Kwong, Ling Lu Kang and Ling Lu Kiong.
Chiong Ho is SOP group executive chairman and a major shareholder of the company.
Miri-based SOP group owns 88,386 hectares of oil palm plantations (as at Dec 31, 2018).
The group has significant investments in downstream palm oil processing businesses, including owning refinery and fractionation plants, a kernel crushing plant, a biodiesel plant and a phytonutrient plant
in Bintulu.
In order to participate in the regional edible oil shipment business and provide logistical support to the group’s palm oil business, SOP had in 2012 established a joint venture with Danum Shipping Sdn Bhd, a wholly-owned subsidiary of Shin Yang Shipping Corporation Bhd (Syscorp).
The joint-venture company is Micaline Sdn Bhd, with Danum and SOP having 55 percent and 45 percent equity interest respectively. Micaline operates oil and chemical tankers for the shipment of palm oil.
In 2017, Danum disposed of its entire equity interest in Micaline to Ita @ Penita Hazmi for about RM1.2 million.
SOP and Syscorp have common shareholders. Meanwhile, Syscorp, which owns a fleet of 268 vessels, has seen its share price fallen to an all-time low of 21 sen last week albeit on light daily trading
volume.
The company’s substantial shareholder Ling Chiong Sieng disposed of 542,000 shares on Oct 21 and 22, according to filings with Bursa Malaysia.
With the disposal, Chiong Sieng’s direct holding in the company has been reduced to about 34,260,668 million shares or 2.855 percent. He has indirect holding of 660,493,796 shares or 55.03 percent via the Ling family’s vehicle, Shin Yang Holding Sdn Bhd.
In financial year ended June 30, 2019 (FY2019), Syscorp incurred group net loss of RM87.38 million on revenue of RM636.98 million as compared to net profit of RM24.34 million on revenue of RM621 million in FY2018.
The company attributed its huge losses mainly to the impairment loss on other receivables of RM52.5 million from United Arab Emirates’ (UAE) companies recognised in the
fourth quarter.
The dismal performance was also due to lower margin in shipping segments on bulk carrier sector and barges and tugboats for preparation and docking costs incurred.
Besides, the unrealised margin on production overheads of new shipbuilding works in progress during construction has also resulted in losses incurred for the year under review.
Other than shipping business, Syscorp is also into ship building and ship repair.
