KUALA LUMPUR: GFM Services Bhd
has entered into a heads of agreement with Shapadu Corp Sdn Bhd and its wholly-owned subsidiary Shapadu Energy Sdn Bhd to potentially acquire a 45% stake in Shapadu Energy for RM30mil cash.
Under the proposed acquisition, GFM will subscribe to new ordinary shares in Shapadu Energy for RM10mil, representing 15% equity stake, as well as acquire 30% of equity interest directly from Shapadu Corp for RM20mil.
GFM and Shapadu will also enter into a put and call option agreement, which grants GFM the right to sell its shares in Shapadu Energy back to Shapadu Corp, and conversely Shapadu Corp the right to purchase GFM’s shares in Shapadu Energy.
If exercised, the consideration will involve a combination of the issuance of shares and redeemable convertible preference shares
(RCPS) in SCRA.
According to GFM, this could potentially increase its stake in SCRA to 49% through share issuance, and up to 60% upon RCPS conversion.
The put and call options are valid for two years from the execution of definitive agreements.
Shapadu Energy is involved in the downstream maintenance and turnaround services at the Pengerang Refinery and Petrochemical Complex within the Pengerang Integrated Complex (PIC) in Johor, as well as upstream maintenance, hook-up and commissioning activities.
Additionally, Shapadu Energy, through its 60%-owned subsidiary, Shapadu CR Asia (SCRA), holds the Integrated Turnaround Main Mechanical and Maintenance Mechanical Static (TA4MS) contract from PETRONAS-Saudi Aramco joint venture firms Pengerang Refining Company Sdn Bhd and Pengerang Petrochemical Company Sdn Bhd.
"“The proposed acquisition represents a strategic move to strengthen the enlarged GFM Group’s foothold in the O&G facilities maintenance (FM) sector.
"By joining forces, we aim to leverage the combined strengths of both companies to enhance the group’s capabilities and capacity to deliver plant turnaround services, particularly under the TA4MS contact,” said GFM group managing director Ruslan Nordin in a statement.
