JIN - INSIDE INFORMATION
ACQUISITION OF A VESSEL
The Board of Jinhui Shipping and Transportation Limited announces that a wholly-owned subsidiary of
the Company entered into a memorandum of agreement on 4 December 2024 for the acquisition of an
Ultramax at a purchase price of US$24,520,000.
THE ACQUISITION
The Purchaser entered into the Agreement with the Vendor on 4 December 2024 for the acquisition of
the Vessel at a purchase price of US$24,520,000. The Vessel will be delivered by the Vendor to the
Purchaser between 1 January 2025 and 28 February 2025.
Information on the Group and the Purchaser
The principal activity of the Company is investment holding and the principal activities of its
subsidiaries are international ship chartering and ship owning.
The Purchaser is a ship owning company and a wholly-owned subsidiary of the Company as at date of
this announcement. The principal activities of the Purchaser are ship owning and chartering.
Vendor
The Vendor is a company incorporated in Hong Kong with principal activity of vessel leasing.
To the best of the Board’s knowledge, information and belief having made all reasonable enquiry, the
Vendor is an independent third party not connected with the directors, chief executive or substantial
shareholders of the Company or its subsidiaries or any of their respective associates.
Vessel
The Vessel is an Ultramax of about deadweight 61,441 metric tons, built by Dalian Cosco KHI Ship
Engineering Co., Ltd. in 2017. The Vendor warrants that the Vessel, at the time of delivery, is free from
all charters, encumbrances, mortgages and maritime liens or any other debts. The Vessel will be
delivered to the Group on a free from charter basis.
JINHUI SHIPPING AND TRANSPORTATION LIMITED
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Consideration
Under the Agreement, the purchase price for the Vessel is US$24,520,000 and is payable by the
Purchaser as follows :
(1) an initial deposit of US$2,452,000 will be payable by the Purchaser within three banking days
after the date that (i) signing of the Agreement and the escrow agent agreement; and (ii) the
confirmation from the escrow agent that the escrow account has been opened; and
(2) the balance of US$22,068,000 will be payable by the Purchaser on the delivery of the Vessel
which will take place between 1 January 2025 and 28 February 2025.
The purchase price for the Vessel will be payable by cash in United States Dollars. The purchase price
of the Vessel was determined by reference to market intelligence the Company has gathered from
shipbrokers and its own analysis of recently concluded sale and purchase transactions of vessels of
comparable size and year of built in the market, valuation from independent valuer and on the basis of
arm’s length negotiations with the Vendor.
We observe the recent market data of transactions of similar type of vessels in the market and also
consider the general conditions of the Vessel, the classification record of the Vessel, the age and size,
the shipyard where the Vessel was originally built and the date for next drydocking inspection. However,
as each vessel is never identical, management has based on the experiences and market knowledge to
consider.
The Directors consider that the purchase price of the Vessel is fair and reasonable and the acquisition of
the Vessel is in the interests of the Company and its shareholders as a whole.
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REASONS FOR THE ACQUISITION OF THE VESSEL
The Group’s principal activities are international ship chartering and ship owning. Despite the recent
development in the shipping market, the Directors continuously review the prevailing market conditions
of the shipping industry and continue to seek to fine tune the quality of our fleet and adjust the Group’s
fleet profile as appropriate. The Directors believe that the acquisition of the Vessel will enable the Group
to optimize the fleet profile through this ongoing management of asset portfolio.
Dry bulk shipping market is a highly volatile market. Market conditions can change rapidly due to
factors like global economic conditions, supply and demand dynamics, and geopolitical events. We try
to strike as good as possible, the balance of additional maintenance costs that is associated with the
aging of a vessel, the expected revenue generating ability and cargo flexibility when compared to
younger vessels, the potential asset value appreciation of an asset, as well as the importance of ensuring
we are financially nimble by monetizing suitable assets. We believe in being prepared at all times for
future possible opportunities of redeployment of capital into other more suitable assets that may arise
going forward while keeping leverage at comfortable levels. We will continuously monitor the market
as well as our operations going forward and look out for opportunities to maintain a reasonably modern
and competitive fleet, not ruling out any future disposal of smaller and older vessels and replace with
vessels with larger carrying capacity and longer asset lives. We will make such decisions on an ad hoc
basis to maintain high financial flexibility and operational competitiveness.
The Group currently operates thirty three vessels, including twenty five owned vessels and eight
chartered-in vessels, with total carrying capacity of approximately 2,276,000 metric tons.
It is currently expected that approximately 70% of the purchase price of the Vessel will be funded by
bank financing and the remaining will be funded by internal resources of the Group.
GENERAL
The Company is an approximately 55.69% owned subsidiary of Jinhui Holdings. The acquisition of the
Vessel has been approved by written approval from Fairline Consultants Limited and Timberfield
Limited, a closely allied group of shareholders of Jinhui Holdings together hold approximately 64.53%
of the total issued shares of Jinhui Holdings and voting rights in general meetings of Jinhui Holdings,
according to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong
Limited.
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DEFINITIONS
In this announcement, unless the context requires otherwise, the following expressions of the following
meanings were used:
“Agreement” the memorandum of agreement dated 4 December 2024 entered into between the
Vendor and the Purchaser in respect of the acquisition of the Vessel;
“Board” the board of Directors;
“Company” Jinhui Shipping and Transportation Limited;
“Directors” the directors of the Company;
“Group” the Company and its subsidiaries;
“Jinhui Holdings” Jinhui Holdings Company Limited, a company incorporated in Hong Kong,
whose shares are listed on the Hong Kong Stock Exchange Limited
(stock code: 137);
“Purchaser” Jinzhou Marine Inc., a wholly-owned subsidiary of the Company;
“Vendor” Sea 17 Leasing Co. Limited, a company incorporated in Hong Kong; and
“Vessel” a deadweight 61,441 metric tons bulk carrier “GREAT CENTURY” registered
in Hong Kong.
By Order of the Board
Ng Kam Wah Thomas
Managing Director
4 December 2024