Hong Kong-listed
NewOcean Energy Holdings Ltd - an investment holding company that primarily sells and distributes liquefied petroleum gas (LPG) - has
announced that its susidiary
Maxx Investments has agreed to acquire the remaining equity of a bunker business that has been affected by the recent collapse of OW Bunker for HK$250 million (US$32.2 million).
Maxx Investments - already a 49 percent owner of Hong Kong bunker firm
Ego Time Group - has agreed to buy the entire equity interest of
King Vision-owned
Success Pillar Ltd, whose principal business has been its 51 percent stake in Ego Time Group.
According to NewOcean, Ego Time Group's profit for this year has been "seriously affected by the potential impairment losses related to bunkering contracts made with or through OW Bunker China".
NewOcean said the management of Ego Time Group had informed them of potential losses of approximately HK$58.6 million ($7.6 million) for pending trade receivables related to bunkering contracts made with or through OW Bunker China, whilst adding that Ego Time Group's management considered that a certain amount of the pending trade receivables might be recovered in the coming months.
The losses for pending trade receivables would also depend on the outcome of recovery action taken by the Ego Time Group against OW Bunker China and/or against ships which had been supplied by the Ego Time Group and had not paid for the fuel that had been supplied, NewOcean said.
Ego Time Group's bunkering business comprises both bunkering services for local vessels, ferries and engineering vessels operating in or from the territorial waters of Hong Kong, and bunkering services for ocean going container ships, ore carriers, and merchants ships.
The directors of NewOcean said they believed the OW Bunker issue "should not materially affect the value of Success Pillar and the consideration to be paid under the Sale and Purchase Agreement".
In particular, NewOcean's directors took into account Ego Time Group’s sales revenue growth from approximately HK$2,632 million for 2013 - its first full year of operation - to approximately HK$3,687 million for the first 11 months of 2014.
