KUALA LUMPUR: Bottled water manufacturer Bio Osmo Bhd yesterday explained that its decision to terminate its diversification into the oil and gas (O&G) industry was simply due to 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 O&G, as well as the peripheral industries, going forward, may not be as robust as anticipated earlier.
“Therefore, the company has decided not to pursue any exposure into the O&G-related service industry at this juncture, and as such, has terminated the proposed acquisition,” it said in a filing with Bursa Malaysia yesterday.
The company said it will continue to pursue the acquisition of suitable businesses to improve its profitability.
On Wednesday, loss-making Bio Osmo announced to the stock exchange that the conditional share sale agreement to acquire a 49% stake in Bayam Enterprise Sdn Bhd — a catering company that serves the O&G 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 the O&G had sparked interest in its hardly-traded shares.
This article first appeared in The Edge Financial Daily, on December 5, 2014.