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BAKER TECHNOLOGY LIMITED ANNUAL REPORT 2012
BAKER TECHNOLOGY LIMITED ANNUAL REPORT 2012
25. Deferredgainondisposalof subsidiary
On 16 April 2010, the Company received an unsolicited offer from Yangzijiang Shipbuilding (Holdings) Ltd
(“YZJ”) to acquire the entire share capital of PPLH, a company which holds an aggregate of 15% interest in
PPLS, for US$155,000,000. TheCompany accepted the offer on 23April 2010.
On 15May 2010, SembcorpMarine Ltd (“SCM”), which holds 85% shareholding in PPLS, commenced legal
proceeding against PPLH and its wholly owned subsidiary, E-Interface Holdings Limited (“E-Interface”) inwhich
PPLS is also a party as second defendant to the counter claim (Suit no. S351/2010/H). SCM has asked the
High Court of Singapore to rule, inter alia, that the shareholders’ agreements are no longer in force, to direct
PPLH and E-Interface to transfer the remaining 15% shareholding interest in PPLS to SCM against its tendered
payment of gross S$59,433,522, and to order them to pay damages for disclosing or causing to disclose
confidential information of PPLS to the third party buyer in breach of the shareholders’ agreements.
On 1 September 2010, the Company entered into an amendment and novation agreement with YZJ and a
new buyer, QDAsia Pacific Ltd (“QD”), to vary the terms of the original offer, including substituting the original
buyer with a new buyer and a revision of consideration from US$155,000,000 to US$116,250,000. Under
the revised offer, it was also provided that in the event that a final judgment or order of the Supreme Court
of Singapore in the legal suit determines, or it is agreed by a settlement agreement between SCM, PPLH and
E-Interface, that:
(i)
SCM had validly exercised a right of pre-emption over the 15% shareholdings in PPLS; or
(ii) PPLH had validly exercised its put option under the supplemental agreement dated5 July 2003 in respect
of the 15% shareholdings in PPLS,
then, QD shall:
(i)
effect the transfer of shares in PPLH to theCompany; and
(ii) pay to theCompany (1) the amount of all dividends receivedafter 16April 2010by PPLHand E-Interface
from PPLS and (2) the amount of any sum received by PPLH from SCM for the 15% shareholdings in PPLS,
and
theCompany shall repay the revised consideration of US$116,250,000 back toQD.
On 26 October 2010, the Company completed the above disposal of PPLH for a revised consideration of
US$116,250,000 (or S$150,543,750).
25. Deferredgainondisposalof subsidiary (cont’d)
On 30May 2012, theHighCourt ruled in PPLH’s favour and dismissed SCM’s claims in their entirety.
On 29 June 2012, SCM filed an appeal against those parts of theHighCourt’s decisionwhich relate to:-
(i)
whether the shareholders’ agreements between SCM and PPLH is premised on equal shareholding and
continues to apply in its entirety despite SCM’s ownership in PPLS being raised from 50% to 85%;
(ii) whether SCMwas entitled to terminate the shareholders agreements due to a breach by PPLH; and
(iii) certain resolutions and orders which are consequential on the findings relating to (i) and (ii).
The appeal does not affect the ownership of the 15% shareholdings of PPLH in PPLS and as a result theGroup
has fulfilled its obligation toQD under the amendment and novation agreement and the disposal of PPLH toQD
is considered complete.
TheGrouphad recordedanamount of $58,237,148as deferredgainon thedisposal of this investment in PPLS
in its consolidated balance sheet as at 31Decemeber 2011. Management has deferred the recognition of this
gaindue to thependingoutcomeof the legal case then. The legal casewas finalisedduring the current financial
year andmanagement has recognised this amount to the consolidated profit and loss for the year.
The gain on disposal for theGroup andCompany is computed as follows:
Group
Company
$
$
Proceeds from disposal (US$116.25m)
150,543,750 150,543,750
Less:
Cost of investment in PPLH
–
3,600,000
Share of net assets of PPLH (excluding the investment in joint venture)
15,424,865
–
Carrying value of the investment in joint venture at the date of disposal
71,879,379
–
Expenses on disposal
5,002,358 5,002,358
92,306,602 8,602,358
Gain on disposal
58,237,148 141,941,392
for the financial year ended 31december 2012
for the financial year ended 31december 2012
notestothe
financialstatements
notestothe
financialstatements
