The Board of Directors of Samudera Shipping Line Ltd ("the Company") wishes to announce that the Company has entered into a joint venture agreement with Jardine Matheson (Malaysia) Sdn Bhd ("Jardine") to invest in Galaxy Shipping Services Sdn. Bhd ("Galaxy Shipping"), a company incorporated in Malaysia.
Galaxy Shipping has an authorised share capital of RM1,000,000.00 comprising of 1,000,000 ordinary shares of par value RM1.00 each, of which 2 ordinary shares have already been issued at par and fully paid up by Jardine. Pursuant to the joint venture agreement, the Company and Jardine will subscribe for 600,000 ordinary shares and 399,998 ordinary shares respectively in cash at par in Galaxy Shipping. The shareholding in Galaxy Shipping after the respective parties' subscription will be as follows :-
(a) The Company - 60%
(b) Jardine - 40%
The subscription of the 600,000 ordinary shares in Galaxy Shipping by the Company will be funded by internal sources.
The principal activity of Galaxy Shipping is to carry on the business as general shipping agents in Malaysia. It is a term of the joint venture agreement that the Company is to appoint Galaxy Shipping as its exclusive general shipping agent in Malaysia on such terms and conditions as may be agreed between the Company and Galaxy Shipping.
The rationale for the joint venture is that it is part of the Company's strategic plan to raise the Company's profile in Malaysia, to increase the Company's target market share for both carrier-owned container as well as shipper-owned container shipping services and to enable the Company to monitor its business better. The Company was previously using third party shipping agents for its operation in the Malaysian ports. With the Company's 60% stake in Galaxy Shipping and Galaxy Shipping's appointment as the Company's exclusive general shipping agent in Malaysia, the Company will be able to develop its business with Jardine's expertise, customer network, marketing capabilities and experience in the ship agency business in Malaysia.
This joint venture is not expected to have any material effect on the earnings per share and/or the net tangible assets per share of the Company for the financial year ending 31 December 2002.
None of the directors or substantial shareholders of the Company has any interest, direct or indirect in this joint venture.