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Mercator’s arm enters into termination, settlement pact with owners of two vessels

04 Jan 2013 Evaluate

Mercator’s Singapore based step down subsidiary, Mercator Lines (Singapore) (MLS) has entered into separate early termination and settlement agreements with the owners of two vessels pursuant to which MLS and the respective owners have agreed to the early termination of the respective charter effective December 31, 2012 and March 31, 2013 respectively. 

The consideration for the agreement by the Owners to the early termination of the charter of vessel is in the form of cash compensation and issue of 64,215,205 new ordinary shares (Compensation shares) in the capital of MLS subject to compliance of applicable laws regulations or listing rules of the Singapore Exchange Securities Trading (the ‘SGX-ST’). The compensation shares will be issued at price equivalent to the closing  price for the ordinary share on the  SGX-ST on the market day, preceding the date on which the compensation shares are issued to the Owners, provide that the issue price per share shall not be less than $0.114

The compensation shares will rank in all respects with the existing shares. Singapore based wholly owned subsidiary, Mercator International ( MIPL) which is the parent company of MLS, will grant a put option to each of the Owners which will entitle them to require MIPL to purchase all of the compensation shares at the price equivalent to 50 percent of the closing price for the share on the SGX- ST on the market day preceding  the date on which the compensation shares are transferred to the Owners or at such other price as may be mutually agreed between the company and the Owners.

The Put Option may only be exercised within 60 days after the fourth anniversary of the date on which the compensation shares are transferred to the Owners. On issuance of the compensation shares, MIPL’s shareholding in MLS will decline from 71.95% to 68.44%. In the case of exercise of the Put Option by the Owners, MIPL’s shareholding will increase to 73.32%.

Mercator Share Price

0.84 0.00 (0.00%)
10-Mar-2023 18:02 View Price Chart
Peers
Company Name CMP
Shipping Corpn. 290.45
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