Asia Bioenergy jumps 17% on O&G transportation venture

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KUALA LUMPUR (Jan 28): Shares of Asia Bioenergy Technologies Bhd rose in active trade on Wednesday morning after its agreement to acquire oil and gas (O&G) transportation providers.

It rose as high as 24.5 sen, 16.67% or 3.5 sen higher than the closing price of 21 sen yesterday.

As of 9:58am earlier this morning, the counter was trading at 23 sen or 9.52% higher, having 60.72 million shares transacted.

Yesterday morning, Asia Bioenergy (fundamental: 1.2; valuation: 0) announced that it had entered into a heads of agreement with Reachmont Logistics Sdn Bhd (RLSB) and Singapore-based Hoe Leong Corp Ltd (HLCL) to facilitate the acquisition of two O&G transportation providers.

The companies that it intend to acquire are Semua Shipping Sdn Bhd (SSSB) and Semado Maritime Sdn Bhd (SMSB), at a price tag of RM168 million, which it plans to pay via issuance of new shares.

Under the HOA, SSSB and SMSB shares will be transferred to a special purpose vehicle (SPV), Subsequently, Asia Bioenergy will acquire the entire equity interest of the SPV by issuing shares worth RM168 million to HLCL, RLSB and ERSB.

The shares to be issued will translate to about 20% stake in the Asia Bioenergy’s enlarged shareholding, the group’s executive director Steve Tan Sik Eek told a press conference yesterday.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)