SINGAPORE: New Silkroutes Group Limited announced that its wholly-owned subsidiary, New Silkroutes Capital Pte. Ltd, has signeda share sale and purchase agreement with TK Energy Limited for the disposal of the Company’s entire shareholding interests in International Energy Group (IEG) Pte. Ltd. for USD 10 million in cash.
The consideration for the disposal was reached after arm’s length negotiation with the purchaser, on a willing-buyer and willing-seller basis, and taking into account the historical earnings and net tangible assets of International Energy Group (IEG). In connection with the disposal, the purchaser TK Energy Limited will make available to New Silkroutes Group a loan of USD 10 million which will be deemed repaid in full when the disposal is completed.[the_ad id=”31605″]The disposal is subject to certain conditions, including the approvals from the SGX-ST and shareholders. Thereafter, International Energy Group will cease to be a subsidiary of the Company and the Company will become a full-fledged healthcare group.
The purchaser, TK Energy Limited, is a private limited company incorporated in Hong Kong formed by stakeholders with interests in the oil and gas sector. As part of the acquisition, it will make available to International Energy, credit facilities of up to USD 250 million of which an initial loan of USD 50 million will be advanced to International Energy which will be capitalised as shares in the latter upon completion of the sale and purchase agreement.
The disposal is expected to result in a gain of approximately USD 10 million for the Group. This will reinforce the Company’s earnings base, strengthen the Group’s operations and financial position, and enhance the long-term interests of shareholders.
Dr Goh Jin Hian, New Silkroutes Group Chief Executive Officer, said: “We have secured a financially strong strategic buyer for International Energy and we are pleased that they also recognise the value of our oil trading division. The sale will provide the Group with the funds to expand its healthcare business locally and regionally, through a mix of acquisitions, collaborations, and organic growth. Moving ahead with healthcare as our core focus, we aim to deliver shareholder value in the longer term. For a start, Group has plans to resolve the issue of longstanding negative retained earnings with capital reorganisation. After this exercise, Group will have a more efficient capital structure, and will be well positioned to start dividend payments, thereby improving shareholders’ return on equity”.