LFG Buys Two Bulk Carriers Worth RM213.2 Million

Lianson Fleet Group Berhad (LFG) is set to significantly expand its marine transport capabilities with the acquisition of two Ultramax-class bulk carriers. The deal, valued at $52.32 million (RM213.2 million), was finalized through its wholly-owned subsidiary, Lianson Fleet Pte. Ltd. (LFPL), which signed two Memoranda of Agreement (MOA) on July 9, 2026, to purchase the vessels MV Tian Mu Shan and MV Yan Dang Shan from Chinese companies.

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The purchase was financed through a combination of internal funds and bank loans, with LFG currently in discussions with financial institutions to secure part of the purchase price to optimize the group's capital structure and maintain financial flexibility.

The purchase will be funded through a combination of LFG's internal resources and bank loans. The company is currently in discussions with financial institutions to secure partial financing, aiming to optimize its capital structure and maintain financial flexibility. The agreed-upon prices reflect current market values for bulk carriers of similar age and specifications, considering their certification status and future earning potential.

According to the agreement terms, a 10% deposit is required within three business days of MOA signing, with the remaining balance due one business day after the seller issues an estimated delivery notice. MV Tian Mu Shan is expected to be delivered between June 11 and August 11, 2026, while MV Yan Dang Shan is scheduled for delivery between September 10 and October 10, 2026. The vessels will be handed over at the seller's chosen port worldwide.

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The purchase price was agreed on the principle of willing buyer and willing seller, taking into account the current market value and prices of comparable bulk carrier transactions in terms of age and specifications, vessel class certification status and future earning potential.

This strategic acquisition marks LFG's entry into the Ultramax-class bulk carrier segment, expanding its fleet beyond existing Supramax-class vessels. LFG expects these larger ships to bolster recurring revenue through potential long-term charter contracts and high utilization rates, thereby enhancing the group's earnings visibility. The company anticipates a positive contribution to its profits for the fiscal year ending December 31, 2026, and subsequent years.

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The acquisition is in line with the group's strategy to expand its marine transport fleet and diversify its operations beyond the offshore support vessel segment.

The bulk carrier market outlook remains favorable, buoyed by regional trade in bulk cargo and commodities, extended shipping distances due to altered trade routes, canal congestion, and supply-demand imbalances in various regions. LFG believes this expansion will not significantly impact its issued share capital or major shareholder holdings, as no new shares are being issued. However, the group's gearing ratio is expected to increase if bank loans are utilized for financing.

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The new vessels are expected to strengthen recurring revenue streams through potential long-term charter contracts and high utilization rates, thereby enhancing the group's earnings visibility.