Mencast Holdings’ 5NF wholly-owned subsidiary, PT Mencast Offshore and Marine (PT MOM), has entered into a conditional sale and purchase agreement (SPA) with PT Rainbow Tubulars Manufacture to dispose Mencast’s Batam property at Jl. Brigjen Katamso KM 18, Tanjung Uncang, Batu Aji.
Along with the disposal of the property, Mencast is also disposing two “right to build” certificates. The first, certificate no. 5410, has a total land area of 45,781 sqm (492782.58 sq ft). The second certificate, certificate no. 5411 has a total land area of 5,012 sqm.
The property comprises land and buildings including an office as well as workshops. Certificate no. 5410 will expire on Oct 31, 2038, while certificate no. 5411 will expire on Sept 6, 2035.
The property currently houses the operations of PT MOM which is in the business of fabrication of steel structure, ship repairs and engineering for the offshore, oil and gas industries.
Following the completion, Mencast is expected to record a loss of $0.18 million upon the property’s disposal.
The net asset value (NAV) attributable to the property is $4.28 million as at Dec 31, 2022. The market value of the property is around IDR57.95 billion ($5.01 million) based on a valuation report dated Dec 16, 2022. The valuation was conducted by Indonesian valuation firm KJPP FAST (Kantor Jasa Penilai Publik Firman, Suryantoro, Sugeng, Suzy, Hartomo dan Rekan).
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Following the completion of the proposed disposal, Mencast says it expects to further scale down the business activities of PT MOM. The property has been mortgaged to a bank in Singapore, which will be discharged before the completion of the proposed disposal.
Shares in Mencast closed 0.2 cent higher or 5.13% up at 4.1 cents on March 9.
