KUALA LUMPUR (Oct 25): Straits Energy Resources Bhd (formerly known as Straits Inter Logistics Bhd) has proposed a private placement to raise up to RM33.63 million, over half of which it plans to use to acquire a shipping agency service provider to expand its port operation and facility management services.

In a bourse filing, the group said it plans to issue up to 186.81 million shares for the placement at an indicative price of 18 sen per share.

Some RM18.2 million of the proceeds will be used to fund the group's proposed acquisition of Sinar Maju Logistik Sdn Bhd  from Straits Energy's non-independent non-executive director Tan Sri Mohd Bakri Mohd Zinin.

Sinar Maju operates from 10 ports or jetties in Peninsular Malaysia, namely Teluk Ewa Jetty, Langkawi Port, Pasir Gudang-Johor Port, Tanjung Pelepas Port, Port Klang, Kuantan Port, Belungkor Port, Port of Pengerang, Tanjung Pengelih Jetty and Tanjung Langsat Port.

Straits Energy said the acquisition of Sinar Maju will cost RM16.38 million for the initial 90% interest, to be followed by a call option exercisable 30 months later to acquire the remaining 10% stake at RM1.82 million.

The acquisition will also come with a total profit guarantee of RM2.8 million for the financial year ended Dec 31, 2022 (FY22) and FY23, it added.

Straits Energy said the group and Sinar Maju may leverage on their respective customer bases (companies in shipping or bunkering industries, companies with marine operations near to or that are transiting Malaysian ports) upon completion of the acquisition.

This, it added, will lead to an expansion of the enlarged group's market share in the port operation, logistics and transportation sector, as well as expand the group's offering of port operation and facility management services.

Straits Energy said the private placement and acquisition are expected to improve its total profit after tax from RM2.84 million to RM4.24 million based on its FY20 accounts.

Straits Energy's share price closed down 0.5 sen or 2.78% to 17.5 sen on Monday, giving the logistics group a market capitalisation of RM136.6 million.