Pan-United Corporation quits shipping business, selling its subsidiaries Pan-United Shipping and Pan-United Vision to Sedgefield Corporation for 21.8 million USD. The two subsidiaries are forming the company’s tug and barge business, as well as shipping services and trading. Pan-United Vision owns 12 tugboats and 10 barges for the transportation of dry cargo around Southeast Asia, while Pan-United Shipping is engaged with shipping services. The company decided to quit for shipping operations and to concentrate to the two existing core businesses – concrete and cement production, and port operations. The funds from the deal will be used for future projects and working capital.
“Although striving to be cost-competitive, the tug and barge business has been incurring losses since 2013. The industry has been plagued by low freight rates, softening market demand within South-east Asia, and a severe oversupply in vessel capacity”, said Pan-United in official statement. “The proposed disposal will enable the shipping division of the group to be asset-light by not owning the tugs and barges, and focus on the provision of logistics, ship chartering and ship agency services”, adds the company.
Pan-United Shipping is one of Asia’s leading groups specializing in the transportation of bulk cargoes in Asia. The shipping division owns and operates a fleet of coastal vessels plying Southeast Asia. The business provides short and long-term time charter, voyage charter and contract of affreightment that are tailored to customers’ requirements. The Pan-United shipping business has been incurring losses since 2013, including a net loss of 3.0 million USD for the first half of 2016.