BAKERTECHNOLOGYLIMITED
ANNUALREPORT2013
122
Notes to the
Financial Statements
for the financial year ended 31December 2013
25. Recognitionofdeferredgainondisposalof subsidiary
On 16 April 2010, the Company received an unsolicited offer from Yangzijiang Shipbuilding (Holdings) Ltd (“YZJ”) to acquire the
entire share capital of PPL Holdings Pte Ltd ("PPLH"), a companywhich holds an aggregate of 15% interest in PPL Shipyard Pte Ltd
("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 itswholly owned subsidiary, E-InterfaceHoldings Limited (“E-Interface”).
SCM alleged that it had the right to purchase the shares of PPLS owned by PPLH for $59,433,522 and that the right had been
triggeredwhen theCompany accepted the offer todispose of PPLH. SCM also claimed that the shareholders' agreements between
SCM and PPLH had been terminated.
On 1 September 2010, the Company entered into an amendment and novation agreement with YZJ and a new buyer, QD Asia
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 fromUS$155,000,000 toUS$116,250,000.
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). However, pending the outcome of the legal case, theGroup had deferred the recognition of the gain on disposal
on 31December 2010 and 31December 2011.
On 30May 2012, the High Court ruled in PPLH’s favour and dismissed SCM’s claims in their entirety. Though SCM filed an appeal
on 29 June 2012, the appeal did not affect the ownership of the 15% shareholdings of PPLH in PPLS and as a result the Group
had fulfilled its obligation to QD under the amendment and novation agreement and the disposal of PPLH to QDwas considered
finalised.
As the legal case was concluded during financial year ended 31 December 2012, the deferred gain on disposal of subsidiary was
recognised in that year.
The gain ondisposal for theGroup and theCompanywas computed as follows:
2012
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 ondisposal
5,002,358 5,002,358
92,306,602 8,602,358
Gainon disposal
58,237,148 141,941,392
