1. INTRODUCTION
SapuraKencana Petroleum Berhad ("SapuraKencana" or the "Group") wishes to announce that its wholly- owned subsidiary, Geomark Sdn Bhd ("Geomark") has today entered into a Share Sale Agreement with Quippo Prakash Marine Holdings Pte Ltd ("QPMH"), MDL Energy Pvt Ltd ("MDL"), Quippo Oil and Gas Infrastructure Ltd ("QOGIL") to acquire 74,000 ordinary shares of SGD1.00 each in QP ("Sale Shares") which is equivalent to 74% of the issued and paid-up capital of QP ("Agreement").
2. BACKGROUND
Geomark had on 1 August 2008 entered into a Shareholders' Agreement with Quippo Prakash Pte Ltd and AP Prakash Shipping Company Pte Ltd, a subsidiary of MDL and QOGIL, in relation to a joint venture to participate in the construction and financing of a vessel known as QP2000 held by QP ("Vessel").
As at 10 July 2012, the shareholding structure of QP is as follows:
|
|
Shares
|
%
|
|
QPMH
|
73,900
|
73.900
|
|
QOGIL
|
51
|
0.051
|
|
MDL
|
49
|
0.049
|
|
Geomark
|
26,000
|
26.000
|
|
|
100,000
|
100.000
|
(QPMH, QOGIL and MDL are collectively referred to as the "Vendors")
SapuraKencana and the Vendors have now agreed for Geomark to acquire the Sale Shares from the Vendors.
3. SALIENT TERMS OF THE SHARE SALE AGREEMENT
SapuraKencana, through Geomark would acquire the Sale Shares from the Vendors for the sum of USD22,549,617.11 ("Consideration").
The Consideration was arrived at on a willing buyer-willing seller basis after taking into consideration QP's audited consolidated net assets as at 31 March 2012 as well as the market valuation of the Vessel. The Consideration will be satisfied entirely by cash.
Geomark will pay the Vendors the Consideration, in proportion to their respective shareholdings, on the Completion Date (as defined in the Agreement).
The transaction is conditional upon satisfactory results of the financial and legal due diligence on QP. Such due diligence exercise is currently being carried out.
On completion of the Acquisition, QP would become a wholly-owned subsidiary of SapuraKencana.
4. RATIONALE
The Acquisition would enable the Group to have full control of the Vessel in order for it to better manage its operational schedules and costs.
5. RISK
QP is subject to risks inherent in the oil & gas sector and the demand for the Vessel is subject to fluctuations in market demand and charter rates.
6. INFORMATION ON QP
QP is a company incorporated in Singapore on 29 April 2008 and has an issued and paid-up share capital of SGD100,000 comprising 100,000 ordinary shares of SGD1.00 each. The principal activity of QP is marine vessel chartering of the Vessel.
The net profit and net assets of QP as at financial year ended 31 March 2012 were USD3,923,978 and USD32,216,890 respectively.
7. INFORMATION ON THE VENDORS
QPMH
QPMH was incorporated in Singapore on 14 March 2007. It has an issued and paid up share capital of SGD 100,000 and USD 6,232,000 comprising 100,000 and 2,050,000 SGD and USD denominated ordinary shares respectively. QPMH's principal activities are that of an investment holding company.
MDL
MDL was incorporated in India on 13 November 2000. It has an issued and paid up share capital of INR 18,065,610 divided into 1,806,561 ordinary shares of INR 10 each. MDL's principal activities are engineering, procurement, construction, oil & gas and marine related activities.
QOGIL
QOGIL was incorporated in India on 01 July 2005. It has an issued and paid up share capital of INR 300,000,000 divided into 30,000,000 ordinary shares of INR 10 each. QOGIL's principal activities are the provision of infrastructure, equipment, services and other needs of the oil & gas industry.
8. APPROVAL
The highest percentage ratio applicable to the Acquisition is 1.41% pursuant to paragraph 10.02(g) of the Main Market Listing Requirements. Hence, the Acquisition is not subject to the approval of shareholders of SapuraKencana.
The Acquisition is not subject to the approval of the Securities Commission ("SC") and hence, does not fall under the SC guidelines.
9. DIRECTORS' AND MAJOR SHAREHOLDERS' INTEREST
None of the Directors and/or major shareholders of SapuraKencana and/or any person connected to the Directors or major shareholders have any interest, direct or indirect in the Acquisition.
10. ESTIMATED TIMEFRAME FOR COMPLETION
Barring any unforeseen circumstances and subject to the fulfilment of all conditions precedent as stipulated in the Agreement, the Acquisition is expected to be completed within two (2) months from the date of the Agreement.
11. DIRECTORS' OPINION
The Board of SapuraKencana is of the opinion that the Acquisition is in the best interest of SapuraKencana.
12. EFFECT
The Acquisition will have no material effect on the issued and paid up capital of the Group, the Group's earnings and the substantial shareholders' shareholding of the Group.
13. DOCUMENTS FOR INSPECTION
A copy of the Agreement is available for inspection at the registered office of SapuraKencana at Lot 6.08, 6th Floor, Plaza First Nationwide, 161 Jalan Tun H.S. Lee, 50000 Kuala Lumpur during normal office hours from Monday to Friday (except for public holidays) for a period of 3 months from the date of this announcement.
This announcement is dated 13 July 2012.