Mercator sells loss-making Singapore subsidiary for 3 Singapore Dollars

Shipping company Mercator Wednesday announced the sale of its loss-making Singaporean dry bulk subsidiary, in a major step towards exiting from the segment.
The company sold all 900 million shares of Mercator Lines (Singapore) Ltd. for a token amount of 3 Singapore Dollars to three PE investors Bellerophon Holdings Pte Ltd., MIB Investments Private Ltd and Wroclaw Holdings Ltd, it said in a filing on the Bombay Stock Exchange.

The transaction will be completed by March 25, 2016.

The unit had a negative net worth of $180 million (Rs 1,127 crore) as of FY15 end. It posted a loss of Rs 136 crore for the six months till September 30, 2015 and had a debt of Rs 1,000 crore on its books.

The sale will take the debt off its parents books, Mercator's managing director Atul Aggarwal to ET.

Mercator had in a January 18 BSE filing, said the Singapore unit was adversely impacting its consolidated performance.

Aggarwal told ET that Mercator is just left with two vessels in the dry bulk vessels. Those will also likely be sold soon.

The company will retain its other businesses dredging, tankers, coal, logistics and oil and gas.

The dry bulk segment has been the worst impacted in the shipping industry primarily due to lower demand for commodities such as iron ore and coal. The Baltic Dry Index, an assessment of the price of moving the major raw materials by sea and an indicator of shipping rates, has fallen by 95 per cent since 2008.

It closed at 291 on Tuesday according to Bloomberg data.