Marco Polo Marine, the integrated marine logistic group, says wholly-owned subsidiary, Marco Polo Shipping Co., has entered into several agreements to dispose another eight Singapore-flagged vessels (tugs and barges) on a sale-and-leaseback arrangement with a related party for $8.8 million.

Following the sale, these vessels will be leased back to MP Shipping as Indonesian-flagged vessels.

The Sale-and-Leaseback arrangement, which is carried out as part of an ordinary course of business of the group, was approved by the shareholders of the company under a general mandate renewed at the last annual general meeting of the company on Jan 28.

Marco Polo Marine says the sale-and-leaseback arrangement serves two purposes. First, it allows the company to reduce its gearing and improve cash flow, while maintaining its current fleet size since it will continue to have full commercial and operational control of the vessels.

Second, as the company is not permitted to own Indonesian-flagged vessels (since such vessels may only be owned by Indonesians), by embarking on this Sale-and-Leaseback arrangement, it is able to operate Indonesian-flagged vessels freely in Indonesian waters to continue supporting its customers’ logistic requirements in Indonesia.