PETALING JAYA: Deleum Bhd
seeks to fortify its power and machinery business in Indonesia through a proposed acquisition of a 70% stake, or 17,500 shares, in PT OSA Industries Indonesia (OSAII) for US$7mil (RM33.09mil).
The oil and gas services provider said its wholly owned subsidiary, Deleum Services Sdn Bhd, signed the preliminary agreement yesterday for the proposed acquisition with OSA Industries Pte Ltd, OSAII, PT OSA Megah Indonesia (MI), Ong Siow Aik, a Singaporean, and Erik Aristino and Fenty Herlinda, both Indonesian citizens.
Deleum said in a statement the agreement entailed all parties collaborating over a six-month period to facilitate due diligence on OSAII and PT OSA Megah, as well as to negotiate and finalise the definitive agreement for the proposed acquisition.
It added that the preliminary agreement signified Deleum’s strategic direction and commitment to strengthen its presence in the region, to create synergies and intention to bolster the group’s earnings as well as its shareholder value.
The proposed acquisition was also being supported by an international service company with whom both Deleum and OSAII have had a good working relationship over the years.
Deleum group chief executive officer Rao Abdullah said the agreement represented a crucial step in realising the group’s goal to expand its footprint, particularly in the power and machinery business, in Indonesia.
“Growing our presence in Indonesia is our strategic goal, given the enormous potential for our business growth in this market. This agreement represents the critical first step towards realising our mission,” he said.
“We are committed to using this cooperation as a springboard for our larger goal, capitalising on the numerous opportunities that Indonesian market offers us,” he added.
Rao noted that as the group proceeded with due diligence and negotiations, it remained focused on delivering sustainable outcomes that align with its vision of being a leading player in the region.
In the group’s filing with Bursa Malaysia, Deleum noted the proposed acquisition was arranged with the intent that the synergies to be generated between OSAII and Deleum Services would transform the enlarged Deleum group into a key contender for projects in Indonesia.
“The parallel business nature and operation of OSAII and the company’s indirect subsidiary, Penaga Dresser Sdn Bhd, present the opportunity to leverage knowledge, competencies and capabilities across both entities, expanding availability of resources and tapping into economies of scale,” the company said in its filing.
“This strategy is expected to create synergies, fortify the company’s financials and in enhance its shareholder value,” it added.
Deleum said the financial effect of the proposed deal could not be determined until the due diligence was completed.
However, it noted the proposed acquisition was currently expected to contribute positively to the group’s revenue, earnings and net assets for the financial year ending Dec 31, 2024 onwards.
It further noted that the proposed acquisition, which was expected to be funded via internally generated funds and/or external borrowings, would not have any impact on the group’s share capital and/or shareholding structure.
