PETALING JAYA: T7 Global Bhd has proposed to buy the remaining 49% stake it does not own in Fircroft Tanjung Sdn Bhd (FTSB), a company that is involved in the supply of manpower for the oil and gas (O&G) and petrochemicals industries, for a cash purchase consideration of 49% of FTSB’s net assets as at Jan 31,2021.
In a filing with Bursa Malaysia, T7 said its unit Tanjung Offshore Services Sdn Bhd had entered into a share sale agreement with Fircroft Engineering Services Ltd (FESL) for the acquisition of the stake.
FTSB is currently a 51%-owned subsidiary of Tanjung Offshore. Upon completion of the proposed acquisition, FTSB will become a wholly-owned subsidiary of Tanjung Offshore.
FTSB is a joint-venture company between Tanjung Offshore and FESL, a company that was incorporated in the UK, which started in August 2014. “It has since provided over thousands of contractor professionals to the Malaysian O&G and petrochemical industry, ” T7 said.
“The proposed acquisition will enable Tanjung Offshore to fully control the business and operations of FTSB as well as its future business direction. In addition, it is the intention of the group to continue to expand the manpower business of FTSB to include other industries such as aerospace, construction and technology sectors, ” it added.
T7 said it would finance the acquisition via internally generated funds.
The final price tag for FTSB will be determined on May 31 after taking into consideration the collections of outstanding trade receivables and subject to final audit by both parties.
T7 said FTSB has been consistently generating profits for the group for the past three years up to financial year 2019 (FY19). However, its business was slightly affected in FY20 due to the Covid-19 pandemic.
“The management of T7 has initiated turnaround plans for FTSB to ensure its profitability moving forward, ” it said
“Notwithstanding the above, the board is of the view that it is an opportune time to undertake the proposed acquisition and expand its manpower supply business.
“The proposed acquisition is expected to be beneficial to the group and is in line with the group’s strategy to strengthen its service offerings, ” it said.