01748.HK announced that on May 5th, 2022, the charterer (an indirect wholly-owned subsidiary of the company): (1) entered into a memorandum of agreement with the owner under which the owner agreed to purchase and the charterer agreed to sell the ship subject to the terms and conditions therein; and (2) entered into a bareboat charter agreement with the owner in respect of the bareboat charter.

Under the bareboat charter agreement, the charterer charters back the ship from the owner and has a purchase option to purchase the ship from the owner, and if the purchase option is not exercised, the charterer assumes the obligation to purchase the ship from the owner at the end of the charter period, subject to the conditions contained therein.

According to the announcement, the conclusion of the Memorandum of Agreement and the bareboat charter agreement are the after-sale and leaseback arrangements for the ships concerned, and the company is of the view that since the Group can obtain additional working capital while maintaining an appropriate interest in the ships, this will also enhance the cash flow of the Group, so the arrangement is beneficial to the Group.