Singapore-based Parakou Tankers has called off its reverse merger with Cambridge Capital Acquisition, a NASDAQ-listed blank-cheque company formed in 2014.
In a statement issued on 8 May, Parakou Tankers, an offshoot of Hong Kong’s Parakou International, said that both parties could not agree on issues related to the structure of the transaction.
The merger would have seen Parakou Tankers trading on NASDAQ under the symbol ‘PRKU’, with Cambridge’s public shareholders owning 52.5% of Parakou Tankers.
Cambridge’s initial shareholders would have taken a 9.6% stake and Parakou chairman Por Liu would have owned 37.9%.
Parakou currently owns and operates eight 51,000 dwt MR product tankers.
The company plans to purchase an additional 20 MRs through the fourth quarter of 2017.
The company has ordered 12 newbuildings from South Korean shipbuilder SPP and is negotiating to buy some secondhand ships.
Liu commented, “Despite investor interest in the product tanker sector, we were not able to achieve the desired outcome through the current structure. While we are disappointed that we could not come to terms on this merger, we are resolute in our belief that we will grow our company to be a leader in the product tanker sector.”
He pledged that Parakou Tankers would continue to grow through other means, adding he is optimistic about the outlook for products tankers.
“Following the favourable trend started at the end of last year, the sector spot market has improved significantly in the first quarter of 2015, reaching its highest levels since the financial crisis in 2008,” Liu added. “While MR tonne-mile demand should continue to increase, supply also should be limited, which we believe will allow charter rates to strengthen.”