O TTO M ARINE L IMITED - Microsoft Internet Explorer - SGX

As at the Latest Practicable Date, all payments for the above sales and purchases of vessels have been
fully settled.
We do not intend to sell vessels to or purchase vessels from Yawson or Brizill International in the future.
Our Directors believe that the sales and purchases of these vessels to and from Yawson and Brizill
International were not on an arm’s length basis as they were entered into at cost.
Our Company provided certain corporate guarantees to Bangkok Bank and Hong Leong Finance in July
2006 and August 2006, respectively, in respect of the loan facilities extended to Yawson for the purchase of
the above vessels, including all interests and costs. The details of these guarantees are as follows:
Financial
Institution
Amount of
Facilities
Guaranteed
Bangkok Bank . . .
Hong Leong
US$16,000 0.5%
below the
bank’s
prime
lending
rate
Finance. ...... S$2,600 2.4%
above
swap rate
Largest Amount
Outstanding
During the
Period Under
Review
Interest
Rate Per
Annum
Amount Outstanding
as at 31 May 2008
Amount Outstanding
as at the Latest
Practicable Date
(’000) (’000) (’000) (’000)
US$14,400 — —
S$2,600 — —
Our Directors believe that our guarantees to Bangkok Bank and Hong Leong Finance were not on an
arm’s length basis as we did not receive a direct benefit from providing the guarantees.
With the improvement of our financial condition, we secured bank financing from Bangkok Bank to
partially finance our re-purchase of these vessels from Yawson at cost for a total consideration of S$33.6 million.
Based on the independent valuation reports related to these vessels, issued between 2006 and 2007, and
commissioned by Bangkok Bank, the aggregate market value of these vessels was S$40.9 million, which is
21.7% higher than the purchase consideration.
The initial guarantee granted in favour of Bangkok Bank was fully discharged in October 2007, when we
entered into new facility agreements with Bangkok Bank. The guarantee granted in favour of Hong Leong
Finance was fully discharged in December 2007.
Beginning March 2007 to the date we purchased these vessels from Yawson, Yawson leased these vessels
to us under time-charter contracts for a consideration of US$2,000 (for each tug) per day and US$1,800 (for
each barge) per day, to enable us to commence our chartering business in April 2007.
Our Directors believe that the charter agreements entered into with Yawson were on an arm’s length basis
and in accordance with normal commercial terms.
We do not intend to enter into any future transactions of the above nature with Yawson.
Novation by Richman BVI to Richman Singapore of US$7.5 Million Loan Granted by Richman BVI to
PT Lestari
In September 2006, Richman BVI, an unrelated third party, provided a loan of US$7.5 million to
PT Lestari, which was an independent third party at that time, for the purpose of acquiring all of the assets of
PT Batamas, including the Shipyard Assets (see “Our Restructuring and Corporate Structure — Subscription
for 95.0% of the Issued Shares in PT Lestari (the “Lestari Restructuring”)”). The loan had a fixed interest rate
of 6.0% per annum, repayable at any time upon 14 days’ written notice.
In January 2007, the loan was novated in favour of Richman Singapore, on the same terms as described
above. In April 2007, Yaw Chee Siew acquired the entire share capital of Richman Singapore from its
shareholders.
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