ENRA Group Berhad Annual Report 2020

ENRA Group Berhad - Annual Report 2020 145 NOTES TO THE FINANCIAL STATEMENTS 31 March 2020 42. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR (Cont’d) b. Acquisition of a vessel (“Ratu ENRA”) On 8 January 2020, ENRA SPM Labuan Ltd. (“ESPML”) a wholly-owned direct subsidiary of ESPM, in which the Group holds a 60% stake, while SPM Terminals Pty. Ltd. (“SPMT”) hold the remaining 40%, has completed the purchase of a tanker known as Maersk Edgar in accordance to Memorandum of Agreement (MOA) entered into between ESPML with Maersk Product Tankers A/S, a Copenhagen based company, on 7 October 2019. Maersk Edgar was subsequently renamed Ratu ENRA. Ratu ENRA is a double hull oil and chemical tanker with a net tonnage of 10,216 tonnes, was acquired for US$9.3 million or RM38.87 million equivalent and an additional modification works awarded for a total contract value of USD1.82 million or RM7.59 million equivalent are financed via a combination of internally-generated funds and external borrowings. c. Acquisition of Single Point Mooring Buoy System (“Buoy”) On 18 Feb 2020, ESPML has entered into an agreement to purchase a CALM Buoy Banner HEX 06 together with ancillary equipment (collectively “Buoy”) from SPMT and has completed the payments for a total consideration of USD3.5 million via a combination of internally generated funds and external borrowings. This Buoy will be deployed together with Ratu ENRA for an existing offshore contract with a client until 26 April 2022. d. COVID-19 Pandemic The World Health Organisation declared the novel coronavirus (“COVID-19”) a global pandemic on 11 March 2020. The Government of Malaysia imposed the Movement Control Order (“MCO”) on 18 March 2020 and has subsequently entered into the recovery phase of the MCO until 31 August 2020. The extent of the financial impact on the Group and the Company is difficult to assess at the date of authorisation of financial statements due to uncertainties arising from the pandemic. To mitigate its potential risks exposure, the Group and the Company have taken and will continue to take necessary steps to safeguard and preserve its financial condition, emphasising on liquidity management to meet its continuing financial commitments and liquidity needs of business operations. 43. SIGNIFICANT EVENTS SUBSEQUENT TO THE END OF THE REPORTING PERIOD a. Termination of Shareholder Agreement in relation to investment in joint venture. On 10 July 2020, Emrail Sdn. Bhd., has served its 14 days notice to terminate the Shareholder Agreement previously entered into between Emrail Sdn. Bhd. and EEC in relation to the Groups’ investment in joint venture in EEM. On 23 July 2020, a Deed of Termination was entered into between Emrail Sdn. Bhd. and EEC to terminate the Shareholder Agreement. Pursuant to the termination, EEC acquires the remaining 49% equity interest in EEM previously held by Emrail Sdn. Bhd. for RM49 in cash, making EESB a wholly owned indirect subsidiary of the Company.