KUALA LUMPUR (Feb 20): Marine & General Bhd (KL:M&G) has sold its vessel, JM Sutera 6, for US$7.1 million (RM31.54 million) in cash, primarily to pare down borrowings at its subsidiary Jasa Merin (M) Sdn Bhd (JMM).

The vessel was previously used as additional security for JMM’s debt restructuring. Out of the total proceeds, US$6.96 million (RM30.93 million) will be used to repay JMM’s lenders.

JMM is a subsidiary held through M&G’s wholly owned unit AQL Aman Sdn Bhd.

The buyer of the vessel is Thailand-based Lion Great Energy Co Ltd. The disposal is expected to generate a gain of RM4.75 million, which will have a positive impact on M&G’s earnings, net assets, and gearing, said the group in its filing with Bursa Malaysia.

According to M&G, the sale aligns with its fleet optimisation strategy, which focuses on divesting older vessels to reduce the average age of its tanker fleet. This in turn will help reduce maintenance costs, which essentially increase as vessels age.

“The disposal reduces the overall average age of the downstream division’s owned tanker fleet to 11.1 years, down from 11.8 years prior to the disposal. The disposal also reduces the owned fleet size of the downstream division to four vessels, consisting of four chemical tankers,” it said.

As of Oct 31, 2024, M&G had RM65.26 million in cash and bank balances, against total borrowings of RM592.34 million.

On Thursday, M&G’s shares closed unchanged at 30.5 sen, giving the group a market capitalisation of RM238.2 million. The counter has risen over 12% year-to-date.