Asia/Pacific News
Chemoil to Sell Singapore Storage to Oiltanking for $285 Million
SGX listed Chemoil Energy Limited (Chemoil) said in an announcement today it is to sell its Jurong Island, Singapore storage facility to Germany's Oiltanking GmbH (Oiltanking) for $285 million.
Commenting on the rationale for the proposed disposal, Chemoil said, "The Company believes that structural changes that have occurred in the marine fuels market will in the future favour an asset-light business model that is more able to respond quickly to volatility in volumes and margins."
The completion date for the cash sale of Chemoil Storage Limited is currently set to December 18, 2012.
Chemoil expects to gain just over $152 million from the deal, and says it will use part of the proceeds "to meet the growing working capital needs of its expanding fuel supply business," with the remainder being used to invest in other businesses.
"The proposed disposal is therefore being carried out to make more efficient use of the Company's resources by re-allocating funds currently tied up in storage assets into businesses and working capital where the Company believes it can generate greater long term returns and thereby enhance shareholder value," it said.
