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Ramunia acquires MMHE in RM3.2 billion reverse takeover deal
Kuala Lumpur, 22 January 2008:Ramunia Holdings Bhd ("Ramunia") has agreed to acquire Malaysia Marine and Heavy Engineering Sdn Bhd ("MMHE") under a RM3.2 billion deal that will see national carrier MISC Bhd ("MISC") become the majority shareholder of Ramunia.
RHB Investment Bank Bhd ("RHB Investment Bank"), which is advising Ramunia on the deal, announced today that Ramunia and MSE Holdings Sdn Bhd ("MSE") had entered into a conditional sale and purchase agreement for the proposed acquisition. MMHE is a wholly-owned subsidiary of MSE which, in turn, is a wholly-owned subsidiary of MISC.
Managing Director of RHB Investment Bank, Mr Chay Wai Leong, said the proposed acquisition, once completed, would enable both companies to share synergistic benefits that would lead to greater efficiency and thus ensure the provision of enhanced levels of service.
MMHE is involved in marine repair, marine conversion and marine engineering works while Ramunia is involved in major fabrication for the offshore oil and gas ("O&G") related structures.
The acquisition of MMHE by Ramunia will be financed by the issuance of 1.4 billion new ordinary shares of 50 sen each at an issue price of RM1 and 3.6 billion 3.7% new irredeemable convertible preference shares ("ICPS") of 50 sen each in Ramunia.
In addition to the proposed acquisition, Ramunia will also increase its authorised share capital from RM855 million to RM5 billion and make amendments to its Memorandum and Articles of Association.
Under the Securities Commission ("SC") Guidelines, the proposed acquisition is a reverse take-over of Ramunia by MISC via its wholly-owned subsidiary MSE. In this respect, MSE and its concerted parties will be obliged to extend a mandatory general offer for the remaining securities of Ramunia which are not held by them upon completion of the proposed acquisition. However, MSE will seek an exemption from the SC from having to undertake the mandatory general offer.
On completion of the proposed acquisition of MMHE by Ramunia, MSE will then undertake a renounceable offer for sale of 82 million new Ramunia shares at an offer price of RM1 each to the entitled shareholders of Ramunia. This offer will be made on a pro-rata basis, based on the size of each shareholder's stake in Ramunia on an entitlement date to be determined later.
Upon completion of the proposed acquisition, Ramunia will then seek the transfer of its listing from the Second Board to the Main Board of Bursa Malaysia.
Ramunia and its subsidiaries are engaged in a wide spectrum of fabrication activities for the offshore oil and gas structures as well as offshore services comprising hook-up and commissioning works and marine support services and land-based heavy steel fabrication.
The businesses of Ramunia and MMHE will be further strengthened by the synergy of their operations, especially in the engineering, procurement, construction and commissioning projects for exploration and production ("E&P") activities in Malaysia and internationally. Both are also fabricators licensed by Petronas.
In September last year, Ramunia expanded its steel fabrication facilities area from 90 acres to 170 acres. This, coupled with MMHE's own fabrication facilities of about 80 acres, will enable Ramunia to expand its fabrication facilities further and thus increase its operational capacity to undertake more complex, larger scale, multiple and value-added projects such as deepwater fabrication contracts.
MMHE and Ramunia have their individual strengths and expertise that will be complementary to each other. MMHE's strength lies in the construction of various facilities for the offshore oil and gas industry and is focused on the fabrication, building and upgrading of deepwater vessels, marine repair and marine conversion.
On the other hand, Ramunia has established a commendable track record in, amongst others, the shallow water E&P projects. Ramunia has also expanded its business internationally with secured projects in countries such as Australia and the United States.
The proposed acquisition will give Ramunia access to MMHE's expertise and enable both to share synergistic benefits that will see the creation of more efficient, enhanced and productive fabrication facilities in line with an expansion plan to transform Ramunia into a one-stop integration services provider that will offer a range of comprehensive heavy engineering solutions that include the initial design, fabrication and commissioning stages for the oil majors.
Ramunia will be able to leverage on the synergy as an enlarged heavy engineering company to further expand its business both locally and abroad.
On the corporate exercise that has been undertaken by Ramunia, Mr Chay said the proposed issuance of the ICPS had been undertaken to minimise the dilutive effect resulting from the issuance of new Ramunia shares.
Issued by Group Corporate Communications, RHB Capital Bhd. For more information, please call Yeoh Guan Jin at 03-92802536 or 012-3835027 or Adeline Ong at 012-8833345 or 03- 92802552.
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