10. Non-trading items
On 11 April 2019, the Company announced it entered into a hire purchase agreement for the sale of the vessel Oscar Wilde, which had become surplus to operational requirements, to buyers MSC Mediterranean Shipping Company SA for an agreed consideration of €28.9 million, payable in instalments over 6 years. The vessel was delivered to the buyer on 25 April 2019.
The gross consideration of €28.9 million is receivable over 72 months. This amount less related commissions has been discounted to estimated present value of €24.5 million at a discount rate of 4.0% and has been treated as a finance lease receivable (note 16).
In the prior period the Group sold the fastcraft Jonathan Swift. As both vessels had been used in the Group’s Irish tonnage tax trade, no tax arose on either disposal.
These gains on disposal of the vessels are included in the profit for the period and are disclosed as non-trading items in the Consolidated Income Statement.
2019 | 2018 | |
|---|---|---|
€m | €m | |
Consideration | ||
Gross consideration | 28.9 | 15.5 |
Gain on disposal of vessel | ||
Consideration (net of commissions) | 28.2 | 15.1 |
Effect of discounting | (3.7) | - |
Present value of net consideration (note 16) | 24.5 | 15.1 |
Disposal costs | (0.5) | (0.1) |
Employee benefit costs associated with disposal | (0.5) | (0.2) |
Net proceeds | 23.5 | 14.8 |
NBV of vessel disposed of | (8.6) | (1.1) |
Gain on disposal | 14.9 | 13.7 |
The total amount included in the Consolidated Cashflow Statement in respect of the disposal of the Oscar Wilde in the period ended 31 December 2019 is €1.6 million. This comprises instalments received net of leasing income of €2.4 million (note 16) less disposal costs of €0.5 million and the cash element of the employee benefit cost €0.3 million. In the prior period the full net proceeds relating to the sale of the Jonathan Swift of €14.8 million were received in the period.