KUALA LUMPUR (Dec 4): Bottled water manufacturer Bio Osmo Bhd explains its decision to terminate its diversification into the oil and gas (O&G) industry, simply because of dim prospects following the recent plunge in crude oil prices.

“In view of the declining petroleum product prices worldwide, the company opines that the prospects of the oil and gas, as well as the peripheral industries, going forward, may not be as robust as anticipated earlier.

“Therefore, the company decided not to pursue any exposure into the oil and gas related service industry at this juncture, and as such, has terminated the proposed acquisition,” it said in an announcement to the exchange today.

However, the company said it will continue to pursue the acquisition of suitable businesses, to improve its profitability.

Yesterday (Dec 3), loss-making Bio Osmo announced to the stock exchange that conditional share sale agreement to acquire a 49% equity stake in Bayam Enterprise Sdn Bhd — a catering company that serves the oil & gas industry — for RM17.15 million, had been terminated. The agreement was signed in late May.

Prior to the official announcement, months of speculation of the company venturing into oil & gas sector, had sparked interest in hardly-traded shares.

Its share price shot up to a multi-year high of 23.5 sen in early January, from 11 sen in December last year (2013). The stock fell 1.5 sen or 13.6% to its year’s low of 9.5 sen, giving a market capitalisation of RM47.37 million.