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Disposal of marine containers

Date:2006-06-21     Publish:本站

Disposal of Marine Containers

COSCO Pacific Limited (the "Company", together with its subsidiaries, the "Group") announces that its indirect wholly-owned subsidiaries entered into the Sale Agreement and the Administrative Services Agreements with "AD ACTA" 634. Vermogensverwaltungsgesellschaft MBH (the "Purchaser" or the "Owner") on 20 June 2006.

The Sale Agreement

Pursuant to the Sale Agreement, Florens Container Inc. together with its direct wholly-owned subsidiaries ("FCI" or the "Sellers") will sell the "Sold Assets", which comprises

(i) marine containers with an aggregate volume of approximately 600,468 TEUs and representing approximately 59.6% of the marine containers of the Group as at 31 December 2005 and used in its operation of container leasing business, and
(ii) the container lease agreements covering those containers (to the extent of the transferred containers) under which the Sellers are the lessors.

The Administrative Services Agreements

Florens Container Services Company Limited together with Florens Management Services (Macao Commercial Offshore) and Florens Container Services (USA), Ltd. (the "Managers"), entered into the Administrative Services Agreements with the Owner for the provision of administrative and management services in connection with the Sold Assets from and after the completion of the sale of the Sold Assets ("Completion").

The Managers will render administrative services with respect to the related containers pursuant to the Administrative Services Agreements on behalf of the Owner such as:

(i) administration and renewal of existing lease contracts;
(ii) sourcing of new lease contracts;
(iii) administering the return and release of containers from depots;
(iv) administration of inspection, maintenance, insurance and storage of the containers;
(v) disposal of the containers; and
(vi) collections and payments of bills on behalf of the Owner.

Amounts Receivable By The Sellers And The Managers

The amounts receivable by the Sellers and the Managers on the date of Completion in aggregate amount to approximately US$869.4 million and consist of the following components:

(i) the Sellers will receive the purchase price of the Sold Assets of approximately US$846.8 million, which is equal to the estimated net book value of the Sold Assets as at 30 June 2006 plus a premium of 12%;
(ii) Florens Management Services (Macao Commercial Offshore) ("Florens Macao") will receive an upfront administration fee in the amount of approximately US$7.4 million (the "Upfront Administration Fee") for undertaking the administrative functions contemplated and to provide an incentive for Florens Macao to achieve certain performance indicators over the initial five-year term of the agreement; and
(iii) Florens Macao will receive an additional fee in the amount of approximately US$15.2 million (the "Finder Fee") for the services rendered by Florens Macao in connection with the transaction (including but not limited to the leading the selling group in the transaction and its documentation).

The purchase price shall be adjusted within two weeks following Completion on the basis of the actual net book value of the containers transferred to the Purchaser at the date of Completion. The Upfront Administration Fee and the Finder Fee will be non-refundable.

Administrative Fees

Florens Container Services (USA), Ltd. or Florens Container Services Company Limited (as the case may be) will charge the following annual fees for their services:-

For long term lease contracts of the containers - 4% of the net operating income under the contract
For master lease contracts of the containers - 8% of the net operating income under the contract
For resale of containers - 2% of the net sales proceeds
For finance lease and other leasing contracts entered into by FCI and ZIM Integrated Shipping Services Limited - 2% of the net operating income under the contract

Reasons For And Benefits Of The Disposal

After the disposal, the Managers will still retain a managerial role in respect of the marine containers being sold to the Owner under the administrative services agreements. The disposal will not affect the container leasing business of the Group, as the Group will purchase new containers and continue to lease them to customers.

The Company considers that according to the current market conditions, the disposal will help the Group to improve the business model and capital structure of its container leasing business, to increase its sources of income and to lower the operational risks. At the same time, it will enable the Group to maintain a good and steady business relationship with its customers in the process of managing the related containers, and to provide more comprehensive and sound container leasing services to its customers.

Upon Completion, the Group is expected to realize an estimated gain of approximately US$51.0 million (after deducting taxes but before direct expenses) from the disposal which is expected to be accounted for in the consolidated financial statements of the Company for the year ending 31 December 2006.

Use Of Proceeds

The aggregate amount to be received by the Sellers and the Managers on the date of Completion of approximately US$869.4 million will be used as follows:

(i) as to approximately US$343.1 million for repayment of outstanding loan facilities of the Sellers;
(ii) as to approximately US$100.0 million for acquisition of additional marine containers;
(iii) as to approximately US$111.8 million for making related tax payments; and
(iv) the balance for working capital and for taking up investment opportunities of the Group as and when they arise.

For further detail information, please refer to the Company's announcement published in The Standard and the Hong Kong Economic Times on 21 June 2006. The announcement can also be retrieved from the Company's website at www.coscopac.com.hk.