KUCHING: Asia Bioenergy Technologies Bhd (AsiaBio) was the top active stock on Bursa Malaysia yesterday following the acquisition announcement.
Yesterday, more than 92.9 million of AsiaBio’s shares was traded at closing, with the share price closing one sen higher at RM0.22 per share.
Its warrants was the second most actively-traded stock with more than 71.3 million shares exchanging hands.
On Tuesday, the group said it entered into a Heads of Agreement (HOA) with the Hoe Leong Corporation Ltd (HLCL) from Singapore and Reachmont Logistics Sdn Bhd (RLSB) to facilitate the acquisitions of Semua Shipping Sdn Bhd (SSSB) and Semado Maritime Sdn Bhd (SMSB).
This move will provide AsiaBio the avenue to expand into downstream oil & gas activities such as transportation of petroleum products within Malaysia, Singapore and the Region.
According to the HOA, the shares in SSSB and SMSB will be transferred to a Special Purpose Vehicle (SPV), which will be collectively held by HLCL, Ebony Ritz Sdn Bhd “ERSB) and RLSB. AsiaBio will then acquire the entire equity interest in SPV via the issuance of AsiaBio’s securities worth RM168 million in value.
The HOA also indicates that the Definitive Agreement for the transaction is subject to regulatory approvals and has an exclusivity period of 3 months.
The SPV will be able to achieve a Profit After Tax (PAT) of RM8 million for the financial year ended 2014 and a PAT of RM14 million for the financial year ended 2015.
For any profit shortfall in 2015, shareholders of the SPV will have to pay AsiaBio amounts proportionate to their existing stakeholdings.
Commenting on the signing of the HOA, non-independent executive director of AsiaBio Mr. Steve Tan Sik Eek said the HOA was in step with AsiaBio’s business strategy to diversify into the downstream oil & gas activities.
“The Proposed Transactions will provide an opportunity for the existing shareholders of AsiaBio to capitalise on SSSB and SMSB’s growth potential in the maritime transportation of clean petroleum products business in the oil and gas industry.
“In addition the shareholders of AsiaBio are expected to benefit from SSSB and SMSB’s 35 years’ experience in involving in the marine transportation business which require high entry standards in term of quality and safety set by the oil and gas industry, not to mention the high capex required for the double-hull ships for carrying the petroleum products.
“We are confident that this proposed acquisition will provide an opportunity for the existing shareholders of AsiaBio to capitalise on SPV’s growth potential in the marine transportation of clean petroleum products business in the oil and gas industry.
“Combining our development expertise and the SPV 35 years’ experience in involving the marine transportation which require high entry standards in terms of quality and safety set by the oil and gas industry, we look forward to creating valuable synergies by working closely with them.”