KUALA LUMPUR (June 20): Malaysian Bulk Carriers Bhd (Maybulk) has proposed to dispose of its bulk carrier Alam Kekal to realise the vessel's increased market value amid elevated commodity demand.

In a bourse filing on Tuesday (June 20), the dry bulk carrier operator said it proposes to obtain a shareholders’ mandate for the vessel’s disposal to a non-related third party for a cash consideration of not lower than 90% of the market value as ascribed by an independent valuer.

The group said it forked out an original cost of investment of RM121.94 million for Alam Kekal in October 2018. Meanwhile, the group noted that it had an audited net book value of RM112.22 million as at end-December 2022.

Maybulk said as at end-May, it has been in discussions with ship brokers to identify potential purchasers for the vessel. It said that based on an indicative disposal consideration of US$30 million (RM138.68 million) as provided through verbal enquiries with brokers, the disposal is expected to give rise to a pro forma gain of RM23.65 million.

Of the indicative consideration, Maybulk has earmarked RM125 million towards future diversification plans to mitigate overdependence risk on its dry bulk business. Meanwhile, RM10.88 million is to go towards working capital and RM2.8 million is for defrayment of the disposal’s estimated expenses.

Subject to requisite approvals being obtained and a buyer identified, Maybulk expects the disposal of Alam Kekal to be completed by the fourth quarter of 2023. Inter-Pacific Securities Sdn Bhd has been appointed as the disposal’s adviser.

Touching on the disposal’s rationale, Maybulk said it provides an opportunity for the group to realise Alam Kekal’s value at a favourable price, which increased on the back of higher demand for commodities amid the global economy’s recovery.

“Obtaining the authority of the shareholders for the disposal of Alam Kekal upfront will provide the group the flexibility to negotiate the sale of Alam Kekal and capitalise on favourable pricing conditions as and when opportunities arise,” the group said.

Maybulk shares closed unchanged at 30.5 sen, giving the group a market capitalisation of RM300.08 million.