Mumbai-based shipping and logistics company Mercator Ltd has agreed to sell its Singapore bulk cargo business to three investors for a token amount of three Singapore dollars.
The dry bulk business is operated by Mercator Lines Singapore Ltd, a unit of Mercator International Pte Ltd, which in turn is a subsidiary of Mercator Ltd.
Mercator International held a stake of about 67 per cent in the Singapore unit at the end of March 2015, according to the Indian company’s annual report.
It has signed an agreement for the sale of Mercator Lines Singapore to Singapore’s Bellerophon Holdings Pte Ltd, MIB Investments Pvt Ltd, and Wroclaw Holdings Ltd, according to a stock market disclosure. The token amount is due to the unit’s negative net worth.
Mercator’s Singapore unit carried debt of about Rs 1,000 at the end of March 2015. It reported a loss after tax of Rs 768 crore for the fiscal year ended March 2015, compared with a loss of Rs 140 crore in the year before. Its revenue fell to Rs 344.96 crore from Rs 459 crorem during the same period.
An emailed query to the company's spokesperson seeking details of the deal didn’t elicit any response by the time of filing this article.
Last month, the company’s board had approved a proposal to exit the dry bulk cargo business as part its ongoing portfolio-restructuring exercise. Mercator had said at the time that the Singapore unit’s operations were adversely affecting the company’s consolidated performance.
The transaction is subject to approvals from Singapore Exchange as well as the board of directors of Mercator and its shareholders and other regulatory approvals, the company said. It added that it expects the deal to be completed by March 25.
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