China Gas (00384) issued an announcement. On February 27, 2024, China Fuel Energy (a wholly-owned subsidiary of the company...
Zhitong Finance App News, China Gas (00384) issued an announcement. On February 27, 2024, China Fuel Energy (a wholly-owned subsidiary of the company) (as the lessee) entered into termination agreements with Fuzhong Legend and Fuzhong Rongyao (owners of two ships called “CHINAGAS LEGEND*)” and “CHINAGAS GLORY (CHINAGAS GLORY)”, respectively. The contracting parties agreed to terminate the ship leasing contract early, which will take effect from the effective date of termination. All rights and obligations under the ship leasing contract cease on the effective date of each termination.
The total right-to-use assets confirmed by the Group under the termination agreement were reduced by approximately HK$967 million. Compared with the confirmed outstanding balance of approximately HK$1,043 million in leasing liabilities under the ship leasing contract, the Group is expected to obtain a revenue of approximately HK$76 million from the early termination of the ship leasing contract. Early termination of the ship leasing contract will not generate any sales proceeds.
Due to changes in the LPG transportation industry and the LPG ship leasing market in recent years, it is beneficial for the Group to restore flexibility in leasing ships to meet its changing LPG transportation needs. The termination of the ship leasing contract allows the Group to review the terms offered by the ship leasing market and optimize its economic benefits by seeking preferential terms offered by the current ship leasing market.