Its name means calm and composure but the superyacht Equanimity at the centre of the storm that is the 1MDB scandal is set to ignite a frenzy of biddings as it went up for auction by the Malaysian government on Monday, 29 October 2018. The US$250 million (RM 1 billion), 300 feet long yacht is among the assets owned by scandal-tainted 1MDB connected to former Prime Minister Najib Razak and missing Malaysian financier Jho Low. It had just recently been cleared for sale by the admiralty court in Malaysia back in August. Ong Chee Kwan, 1MDB’s lawyer had confirmed on Friday, 26 October that the yacht would indeed be sold off by the government.
The process of selling a yacht, and one such as the Equanimity which is considered a superyacht (defined as a yacht that is more than 24 metres in length) is not like your typical auction house bidding. First, the seller, which is the Malaysian government has to engage a broker. The high court of Malaya had appointed London-based brokerage firm Burgess Yachts to handle the sales transaction of the 1MDB-owned vessel that is said to be valued at about US $175 million (RM 716 million). The appointment of this world-renowned brokerage house clearly showed how serious and urgent the sale of the yacht is to ease the Equanimity’s high maintenance cost of RM 3 million per month. Bidding would last nearly a month and scheduled to end on 28 November.
The next step would involve the broker marketing the vessel through print and online media during the one month auction period. The broker may also make use of their extensive network of contacts to inform their industry counterparts of a yacht that is due for sale. As the sale of Equanimity is historically unique, interest to purchase the famous vessel has to be indicated by a US$ 1 million deposit. This is to ensure that only serious buyers come forward. The new owner of the yacht would then be provided with an internationally recognized ownership title free of mortgage and attachments as per admiralty law.
On its official website, Burgess emphasized that “the judicial sales process will follow strict guidelines, but essentially shall be by the submission of sealed bids by qualified potential buyers, to be opened by the Sheriff of the High Court of Malaya in November/December 2018”.Brokerage firms usually draw a ten percent commission from the price of the vessel at the time of sale. A yacht’s value is largely determined by its good condition and reputation. Due to the 1MDB scandal, Equanimity has acquired a rather infamous reputation and brokers believe that this would ultimately be reflected in its selling price.
Millionaires and billionaires own private jets for ease and speed of travel but a yacht is the ultimate status symbol. It could also double up as a luxurious home with much more privacy than a landed one. It is expected that the potential buyers of luxury yachts such as the Equanimity may very well come from Asia itself, namely China.And with the superyacht currently berthed at the Boustead Cruise Centre in Malaysia’s Port Klang, ultra rich Chinese nationals in the market for a yacht to bolster their status need not travel too far to gain a close look at the majestic floating vessel. It has been said that China’s yacht buyers focus on a luxurious interior rather than the exterior as they frequently use their yachts for entertaining business customers and short family trips. In this aspect, serious buyers would be greatly pleased to know that the Equanimity does not disappoint for it has been lavished with the most exotic materials by Winch designs. Its massive size can accommodate up to 26 guests and a crew of 28 members.Sample pictures of the yacht could be viewed here.
Launched in Oceanco shipyard in the Netherlands back in 2014, Equanimity is part of the US$ 1.7 billion assets bought with 1MDB funds. The Malaysian government has had to undertake an arduous path to acquire Equanimity which had been impounded by the Indonesian government near the island of Bali previously.The government hopes to sell off the superyacht in order to recover some of the funds that had been siphoned off 1MDB to finance its purchase. And the sale has to be done as quickly as possible for a yacht’s value depreciates by about 20% in its first year, something the Malaysian government can’t afford as it fights hard to clear the massive debt left behind by its predecessor.
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