KUALA LUMPUR (July 30): Oil and gas services firm Enra Group Bhd (KL:ENRA) plans to sell its Ratu Enra ship for an indicative US$15 million (RM70.06 million), to capitalise on rising market value due to high demand in the industry.

Enra will seek shareholders’ approval for the disposal of the chemical tanker to an external buyer to be identified, for at least 85% of its market value, the company said in an bourse exchange filing. The provisional market value of RM70 million indicates pro forma after-tax gain of RM8.51 million, Enra noted.

More than half of the proceeds from the planned sale has been earmarked for capital expenditure and future investments, Enra said. The rest will go towards meeting working capital, repayment of borrowings, and covering the estimated expenses of the disposal.

Ratu Enra was acquired in January 2020 for US$9.3 million (RM42.94 million). Including upgrades and modifications, the company the total cost of investment for the ship was US$19.5 million. The 20-year old ship could carry up to 37,188 metric tonnes in deadweight tonnage.

The vessel had an audited net book value of US$12.67 million at of March 31, 2024.

Enra expects submission to the relevant authorities for the proposed disposal mandate within two months. If approved, the company could sign a definitive agreement at any time during the mandate, that lasts one year.

Broadly, Enra anticipates increased demand for vessels due to positive trends in the oil and gas and logistics industries, and the proposed disposal mandate will allow the company to sell the Ratu Enra quickly at a favourable price.

“Additionally, proceeds from the sale of Ratu Enra can be effectively allocated according to the proposed plan,” Enra said. “This is expected to positively impact Enra’s financial position, future operations, and long-term sustainability.”

Enra has been in the red for five consecutive quarters. For the fourth quarter ended March 31, 2024 (4QFY2024), the group’s net loss widened to RM7.85 million from RM 7.15 million, driven by a 77% year-on-year drop in revenue to RM 2.23 million, from RM 9.82 million.

For FY2024, the group narrowed its net loss to RM 14.8 million, from RM 25.5 million in FY2023, while revenue increased by 2% to RM 31.1 million, from RM 30.5 million.

Enra shares last traded at 66.5 sen at market close on Monday (July 29), giving the company a market capitalisation of RM98.81 million.