KUALA LUMPUR (May 6): Straits Inter Logistics Bhd has signed an agreement with an upstream oil and gas (O&G) company Elsa Energy Sdn Bhd to explore potential acquisition opportunities.

In a bourse filing, the group said it had entered into a non-binding Heads of Agreement (HoA) with Elsa Energy.

“The HoA forms the basis of consensus and mutual interests between the Company and Elsa in pursuing business cooperation and or collaboration and or partnership agreement for the purpose to further expand their respective business operations,” said Straits Inter Logistics.

Straits Inter Logistics stated that the HoA is to last for four months from today, in which a definitive share sale agreement (SSA) in relation to the proposed collaboration could be finalised and concluded.

It added that an announcement will be made on the final terms and nature on the collaboration between the two companies, and or the acquisition of an equity stake upon the execution of a share sale agreement.

In terms of the rationale of signing the HoA, the group said it allows for the two to explore potential business collaboration opportunities, particularly as Elsa is mainly engaged in O&G upstream segment and Straits Inter Logistics is a provider of oil bunkering services and oil product trading.

The company added that the potential business cooperation between it and Elsa could result in joint-venture (JV) or the acquisition of an equity stake between the two.

In the case of an SSA materialising, UOB Kay Hian Securities (M) Sdn Bhd will be appointed to help undertake the SSA between Elsa and Straits.

The stock closed unchanged at 24.5 sen — with 8.22 million shares changing hands — giving the group a market capitalisation of RM159.41 million.