Courage Marine : Disposal Of Vessel - Mv Cape Warrior

勇利航業集團有限公司*

(Incorporated in Bermuda with limited liability)

On 7 May 2014 (after market hours), Cape Ore, a wholly-owned subsidiary of the Company, entered into the MOA with Providence in relation to the disposal of a vessel, MV Cape Warrior, for a total cash consideration of US$8,698,996.80.
To the best of the Directors' knowledge, information and belief having made all reasonable enquiries, Providence and its ultimate beneficial owner(s) are third parties independent of the Company and connected persons of the Company and none of the Directors or controlling shareholders of the Company has any interest, direct or indirect, in the Disposal.
Cape Ore, a wholly-owned subsidiary of the Company, is a company incorporated in the Republic of Panama with limited liability and is principally engaged in the provision of marine transportation services.
The Disposal constitutes a discloseable transaction of the Company under Rule 14.06(2) of the
HK Listing Rules.
As the Disposal is a disposal of a vessel in connection with the ordinary course of business of the Group being vessel chartering, the Disposal is not a transaction that falls under the scope of Chapter 10 of the Listing Manual of the Singapore Exchange Securities and Trading Limited ("SGX-ST"), and this announcement is made, inter alia, in compliance with the HK Listing Rules requirements as further set out below and under the general disclosure obligations of the Company under the Listing Manual.

(2) Purchaser: Providence Shipping Corporation

* for identification purposes only

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To the best of the Directors' knowledge, information and belief having made all reasonable enquiries, Providence and its ultimate beneficial owner(s) are third parties independent of the Company and connected persons of the Company and none of the Directors or controlling shareholders of the Company has any interest, direct or indirect, in the
Disposal.

Pursuant to the MOA, Providence has agreed to acquire and Cape Ore has agreed to sell MV Cape Warrior which is a Capesize vessel with carrying capacity of approximately 151,688 dwt and beneficially owned by Cape Ore.

The total cash consideration for the Disposal is US$8,698,996.80 and shall be payable by Providence to Cape Ore in the following manner:
(1) a deposit of twenty per cent (20%) of the Consideration shall be lodged in the bank account nominated by Cape Ore within three (3) Banking Days after signing of the MOA; and
(2) the balance of eighty per cent (80%) of the Consideration less the commission payable shall be paid into the bank account nominated by Cape Ore within three (3) Banking Days after the notice of readiness has been tendered by Cape Ore, the exchange of documents has been completed and MV Cape Warrior has been deemed ready for delivery in accordance with the terms of the MOA.
The Consideration was arrived at after arm's length negotiations between Providence and Cape Ore with reference to market intelligence the Company has gathered from its own analysis of recently concluded sale and purchase transactions of vessels of comparable size and year of built in the market. The Directors consider the terms and conditions of the Disposal to be fair and reasonable and are in the interests of the Group and the shareholders of the Company as a whole.

MV Cape Warrior is to be delivered on or before 15 May 2014 and Providence has an option to cancel the MOA if delivery of MV Cape Warrior shall not take place by 15 May 2014.
Completion shall take place upon receipt of the balance of the Consideration by Cape Ore, whereupon Cape Ore shall procure physical delivery of MV Cape Warrior and documents relating to the Disposal to Providence. The Directors currently expect that the Completion and delivery of MV Cape Warrior will take place on or before 15 May 2014.
Upon Completion, the Group will not hold any interest in MV Cape Warrior.
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To the best of the Directors' knowledge, information and belief having made all reasonable enquiries, Providence is a company incorporated in the Republic of Panama with limited liability and is principally engaged in the business of scrapyard.

MV Cape Warrior is a Capesize vessel with carrying capacity of approximately 151,688 dwt. Its flag state is Panama and was inspected and classified by China Corporation Register of Shipping for purpose of safety classification society. It was acquired by the Group in 2012 at purchase cost of approximately US$6,650,000.00. MV Cape Warrior is free from all encumbrances, mortgages, taxes, maritime liens and debts whatsoever.
According to the unaudited management accounts of Cape Ore, the unaudited net asset value of MV Cape Warrior as at 31 March 2014 was approximately US$6,900,000.00.
According to the audited accounts of the Group for the years ended 31 December 2012 and 31
December 2013, the net profit (both before and after taxation and extraordinary items) attributable to MV Cape Warrior was approximately US$2,000,000.00 and approximately US$6,100,000.00 respectively.

The principal activity of the Company is that of an investment holding company and the principal activities of the Group are the provision of marine transportation services, property holding, investment holding and the provision of administration services.

The Directors consider that the Consideration to be attractive in the current market condition.
The Disposal is for demolition and this provides a good opportunity for the Group to generate cash which is intended to be used for general working capital and for funding any future acquisition of further vessels when suitable opportunities arise.
The Directors believe that the terms of the MOA are entered into upon normal commercial terms following arm's length negotiations between the parties and the terms of the MOA are fair and reasonable and are in the interests of the shareholders of the Company as a whole.
The sale proceeds of the Disposal is US$8,698,996.80. The net proceeds of the Disposal of approximately US$8,400,000.00, after deducting the related expenses paid by the Company in a sum of approximately US$300,000.00, will be used for general working capital of the Group and if the right opportunity arises in future, such proceeds can also be used for the acquisition of further vessels.
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Subject to audit, it is estimated that the Group will record a gain on the Disposal of approximately US$1,500,000.00 for the year ending 31 December 2014, which will be reflected in the consolidated profit and loss account of the Group for the year ending 31 December 2014. The gain on the Disposal is calculated by the net proceeds of approximately US$8,400,000.00 arising from the Disposal less the book value of MV Cape Warrior of approximately US$6,900,000.00 as at 31 March 2014.
Apart from the gain on the Disposal to be reflected in the consolidated profit and loss account of the Group for the year ending 31 December 2014, it is estimated that the Disposal would not have a material impact on the Group's financial position or performance.

The Disposal constitutes a discloseable transaction of the Company under Rule 14.06(2) of the HK Listing Rules.

As the Disposal is a disposal of a vessel in connection with the ordinary course of business of the
Group being vessel chartering, the Disposal is not a transaction that falls under the scope of Chapter
10 of the Listing Manual respectively, and this announcement is made, inter alia, in compliance with HK Listing Rules requirements as further set out below and under the general disclosure obligations of the Company under the Listing Manual.
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In this announcement, unless the context otherwise requires, the following expressions shall have the following meaning:
"Banking Days" a day on which commercial banks are open for business in New
York, London or Belgium;
"Cape Ore" Cape Ore Marine Corp., a company incorporated in the Republic of Panama with limited liability, a wholly-owned subsidiary of the Company and the vendor under the MOA;
"Capesize" dry bulk vessels size range as 100,000 dwt or larger;
"Company" Courage Marine Group Limited, a company incorporated in Bermuda with limited liability and the issued shares of which are listed on the main board of the SEHK and on the SGX-ST;
"Completion" completion of the sale and purchase of MV Cape Warrior in accordance with the MOA;
"Consideration" a total cash consideration of US$8,698,996.80 payable by
Providence to Cape Ore; "Directors" the directors of the Company;
"Disposal" the disposal by Cape Ore of MV Cape Warrior subject to and upon the terms and conditions of the MOA;
"dwt" an acronym for deadweight tonnage, a measure expressed in metric tons or long tons of a ship's carrying capacity, including bunker oil, fresh water, crew and provisions;
"Group" the Company and its subsidiaries;
"HK Listing Rules" the Rules Governing the Listing of Securities on the SEHK; "Listing Manual" the Listing Manual of the SGX-ST;
"MOA" a memorandum of agreement dated 7 May 2014 entered into between Providence as purchaser and Cape Ore as vendor;
"MV Cape Warrior" MV Cape Warrior, a Capesize vessel with carrying capacity of approximately 151,688 dwt and beneficially owned by Cape Ore;
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"Providence" Providence Shipping Corporation, a company incorporated in the Republic of Panama with limited liability and the purchaser under the MOA;
"SEHK" The Stock Exchange of Hong Kong Limited;
"SGX-ST" the Singapore Exchange Securities and Trading Limited;
"US$" United States dollars, the lawful currency of the United States of
America; "%" per cent.
By order of the Board Courage Marine Group Limited Hsu Chih-Chien

Chairman

Singapore, 8 May 2014

As at the date of this announcement, the managing Director is Mr. Wu Chao-Huan, the Chairman and non-executive Director is Mr. Hsu Chih-Chien, the executive Director is Mr. Wu Jian, the non- executive Director is Mr. Tsoi Wai Kwong and the independent non-executive Directors are Mr. Chu Wen Yuan, Mr. Foo Meng Kee and Mr. Ngiam Zee Moey.

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