Thursday 28 Mar 2024
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KUALA LUMPUR: Tanjung Offshore Bhd and Bourbon Far East Pte Ltd have aborted the proposed asset injection that would have resulted in a reverse takeover (RTO) of Tanjung Offshore by Paris-based oil and gas giant Bourbon SA.

This confirms a report by The Edge Financial Daily yesterday, quoting a source, that Tanjung Offshore may call off the proposal after the recent meltdown in its share price.

In a filing with Bursa Malaysia yesterday, Tanjung Offshore said it had, together with Singaporean Farid Khan Kaim Khan and his business partners, Mower Tunggal Jaya PT, Megagold Indonesia PT and Zona Maju Mapan PT (BNI shareholders) and their business partners, as well as Bourbon Far East, mutually agreed to terminate the heads of agreements (HoAs) that they had entered into in relation to the proposed RTO. 

The HoAs were terminated yesterday with immediate effect without any legal and financial recourse against each party, the announcement read.

“The parties have decided to mutually terminate the proposals as the economic and financial conditions for an agreement satisfying both parties cannot be met in view of the declining oil prices,” said Tanjung Offshore.

“The mutual termination is not expected to have any material impact on the net assets and profitability of Tanjung for the financial year ending Dec 31, 2014,” it said.

The stock plunged from a high of 65 sen in June to 33 sen yesterday, which reportedly prompted the company’s executives to reconsider the proposed RTO exercise.

The RTO was initially drawn based on Tanjung Offshore’s share price of 70.8 sen, an almost 55% premium to the current market price.

On June 5, Tanjung Offshore announced it had entered into two HoAs to acquire the marine offshore businesses from Bourbon Far East, Farid Khan and his business partners, and BNI shareholders and their business partners.

According to the HoAs among the parties, the assets to be injected into Tanjung Offshore include controlling or majority interests in six entities that collectively own 18 offshore support vessels and five anchor handling tug supply vessels.

In addition, the proposal also included an injection of a 51% stake in licensed ship manager Bourbon Offshore Mitra Sdn Bhd, a 100% stake in Bahtera Sri Kandi Sdn Bhd, a licensed contractor of Petroliam Nasional Bhd, and a 100% equity interest in Bahtera Niaga Indonesia (Labuan) Ltd.

Tanjung Offshore will then issue new shares to the parties at 70.8 sen each.

Tanjung Offshore closed at 33 sen yesterday, giving it a market capitalisation of RM122.77 million.

 

This article first appeared in The Edge Financial Daily, on December 30, 2014.

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