Kim Heng Offshore & Marine, through its wholly-owned subsidiary, Kim Heng Marine & Oilfield (KHMO), has disposed three of its vessels — Kim Heng 186, Kim Heng 1860 and Kim Heng 85 to Bridgewater Marine (Taiwan) for a consideration of $3 million.

Bridgewater Marine is a joint venture company incorporated in Taiwan by KHMO, with an initial paid up capital of NT$1 million ($47,341.11). Bridgewater Marine is 51%-owned by Kim Heng’s Taiwan partner and 49%-owned by KHMO.

Due to the disposal, KHMO and its Taiwan partner has entered into an amended and restated joint venture agreement (JVA) on Feb 16.

All three vessels have a total net value of $1.32 million.

SEE: Amid O&M downturn, Kim Heng O&M snaps up cheap offshore support vessels

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Kim Heng 186’s, Kim Heng 1860’s, and Kim Heng 85’s net book values are $475,000, $748,000 and $100,000 respectively as at Dec 31, 2019. 

If the proposed disposal was completed on Dec 31, 2019, the gain on proceeds would have been $1.67 million.

The consideration of $3 million will be satisfied via a loan extended by KHMO to Bridgewater. Accordingly, the latter will record a debt of the same amount to the former.

According to Kim Heng, the proposed disposal was done to allow Bridgewater to operate and manage the vessels in Taiwan. 

Bridgewater’s principal activity is to expand the group’s offshore and marine business into Taiwan, to support the Offshore Wind Farm project by chartering vessels to customers within the Taiwan territory. 

Justin Anderson Tan Wen Hao, the son of Kim Heng’s executive chairman and CEO Thomas Tan, was also appointed a director of Bridgewater in the same statement.

Shares in Kim Heng closed flat at 4 cents on Feb 16.