STATUS UPDATE PIER REPLACEMENT

Adjustment to the Financing Model

Chaffers Marina Limited has commissioned an independent review by a commercial tax specialist concerning the previous IRD ruling on the GST component of the Capital Contribution. A part of this engagement also involved seeking advice on a financing model Chaffers Marina Limited can adopt moving forward, aiming to ensure mutual benefits for both the company and shareholders when seeking additional funding. The suggested model is a series of interest-free loans from shareholders, complemented by an increase in periodic license fees, to cover the cost of GST over the economic life of the new assets.

The objective of this approach is to enable Chaffers Marina Limited to recover the GST over the asset’s lifetime from the input tax that was initially claimed on the overall Long-Term Asset Management Plan (LTAMP) cost. Furthermore, this approach aims to ensure there’s no increase in the company’s income tax liability. Shareholders would also benefit by not having to pay GST up front as they otherwise would. The GST is effectively deferred and deducted over time from the licence fee (but inflation will diminish the impact of the GST cost over time, so it will feel less onerous than paying and finding the cash for it upfront).

To provide the company full confidence moving forward in this direction, the Board has requested a full binding ruling with IRD. The application has been lodged recently in August and expected to take ten weeks. The team are also currently finalising the model towards this recommendation and the previous levied model.

Preliminary Planning

Apart from the financial aspects of the project, our team is diligently navigating other important facets of this complex undertaking. We are working in collaboration with Poralu Marine, ensuring that we are perfectly aligned in terms of project execution, timelines, and deliverables.

Furthermore, the team is also engaged in regular consultation with our legal representatives, who provide invaluable expertise, advice, and guidance to help us navigate the legal and contractual intricacies tied to this infrastructure project.

We are also taking forward-looking steps to identify and address a broad spectrum of potential issues tied to the project. This includes managing a variety of risks associated with project implementation, such as unexpected delays, resource escalations, changes in regulatory standards, and health and safety issues. By preemptively recognizing these possible hurdles, we can formulate detailed contingency strategies.

Moving Forward

While the team have made significant progress, there are still a number of tasks to complete before we can provide a detailed update. We are diligently working on these and look forward to sharing more information with you in the near future. In the meantime, we encourage you to share any questions, concerns, or suggestions you may have. Your input is highly valued and will help guide us as we continue to move forward.