KUALA LUMPUR (June 30): Eversendai Corporation Bhd is to pay RM235 million to acquire liftboat firm Vahana Offshore (M) Sdn Bhd via the issuance of new redeemable convertible preference shares (RCPS).
Vahana is the privately-owned firm of Eversendai founder Tan Sri AK Nathan, who announced in February that the firm will be injected into Eversendai to improve the oil & gas and construction group’s bottom line.
In a filing with Bursa Malaysia today, Eversendai said it has signed an agreement with Vahana Holdings Sdn Bhd to acquire its 100% equity interest in Vahana Offshore. This will involve the issuance of 770.49 million RCPS in Eversendai at 30.5 sen each.
“The RCPS shall have a tenure of 10 years with cumulative preferential dividend of 3% per annum and is convertible into ordinary shares in Eversendai at a conversion ratio of two RCPS to one Eversendai share. The RCPS will not be listed, quoted and traded on Bursa Securities or any other stock exchange,” the group said.
It added that the issue price 30.5 sen per RCPS was determined after taking into consideration, among others, the five-day volume weighted average market price of Eversendai shares up to yesterday.
Vahana Offshore through its subsidiaries is involved in the operation, chartering and management of liftboats, marine vessels, tugs and barges, the filing showed. The firm owns one unit of operating liftboat dubbed “Vahana Aryan” and another unit of liftboat named “Vahana Arjun” which is currently under construction.
Eversendai said the acquisition may reasonably be expected to contribute 25% or more of the net profit of the group and diversion of 25% or more of the net assets of the group, going forward.
“Upon completion of the proposed acquisition, the Eversendai Group will venture into the liftboat business. In this regard, the company wishes to seek the approval of the shareholders of the company at its forthcoming extraordinary general meeting for the proposed diversification,” it said.
Eversendai said its diversification into the liftboat business offers more opportunities to market its core expertise to energy players.
“Subject to the approvals of the relevant authorities being obtained, the board expects the proposals to be completed by the fourth quarter of 2020,” it added.
Eversendai in the red in 1Q due to forex losses
Separately, the group reported a net loss of RM10.15 million for the first quarter ended March 31, 2020, compared with a net profit of RM11.14 million a year earlier, mainly due to unrealised forex losses amounting to RM11.4 million.
Loss per share stood at 1.3 sen compared with earnings per share of 1.43 sen previously.
Quarterly revenue dropped 42.8% to RM228.5 million from RM399.6 million, dragged by delayed progress on planned sites which is also partially attributable to the Covid-19 lockdown.
On prospects, the group said its order book value stood at a historical high of RM2.9 billion.
“Approximately 44.5% of the order book came from the group’s traditional stronghold in the Middle East region, 29.2% from India, 14.5% from Southeast Asia region and the balance 11.8% from energy sector,” it noted.
Eversendai had also recently secured two European offshore wind renewable energy projects worth RM186 million. These projects, it said, allows the group to position well in the sector to secure more projects, going forward.
“With the record high outstanding order book in hand, the group could unlock its value into revenue gradually in the coming years,” it added.
At Bursa Malaysia today, Eversendai shares settled half a sen or 1.75% lower at 28 sen, for a market capitalisation of RM218.71 million.