Marco Polo disposes tugs and barges on sale-and-leaseback arrangement

Singapore marine logistic group Marco Polo Marine Ltd announced Monday that it had entered into several agreements to dispose 8 sets of Singapore-flagged tugs and barges on a sale-and-leaseback arrangement with a related party for about S$8.8 million.

Following the sale, these vessels will be leased back to MP Shipping as Indonesian-flagged vessels.

The Company said the sale-and-leaseback arrangement allowed it to improve cashflow while maintaining full commercial and operational control of the vessels and to meet cabotage requirement set by the government of Indonesia.

??by embarking on this Sale-and-Leaseback arrangement, we are able to operate Indonesian-flagged vessels freely in Indonesian waters to continue supporting our customers? logistic requirements in Indonesia and to avail ourselves to the business opportunities and operational cost benefits accorded to such vessels which ply Indonesian waters,? the Company said.

With more new coal-fired power plants being built in Indonesia, the consequential higher domestic demand for coal is expected to generate more demand for transhipment and trans-island logistic services within Indonesia. With our increased operating fleet of Indonesian-flagged vessels, further enhanced under the Sale and Leaseback arrangement, our Group is well-poised to ride the growth in this regard.? (alex)