OIL and gas contractor Gaylin Holdings has entered into an agreement on July 7 to acquire industry peer Amos International Holdings for S$48.6 million in an all-shares deal, it announced in a regulatory filing on Monday morning.
As a major transaction and one which involves an "interested person", the proposed acquisition will require the approval of Gaylin shareholders.
Amos International is primarily engaged in marine and offshore services, with operations in Singapore, Shanghai and Hong Kong.
The agreement follows the inking of a non-binding letter of intent with Lighthouse Logistics and Amos International's founder and managing director, Danny Lien, on March 26.
Lighthouse Logistics, which holds 69.4 per cent of Amos International, is an associate of Kyle Shaw, the executive chairman and deemed controlling shareholder of Gaylin. Mr Lien holds a 27.6 per cent stake.
Under the agreement, Gaylin will buy the shares held by Mr Lien and Lighthouse. Lighthouse shall also exercise its drag-along rights to require the registered holders of all remaining shares to sell and transfer these shares to Gaylin.
The consideration for the acquisition will be fully satisfied by the issuance of new Gaylin shares at an issue price of S$0.060 for each new share.
The loss-making firm has sought to move forward with new equity investment, debt restructuring, and a new management team.
In May, it reported a net loss of S$51.6 million for the year ended March 31, but on the back of a significant provision made for slow-moving and aged inventory. Its balance sheet strengthened with cash surpassing total debt for the first time since 2012, by S$0.7 million.
Gaylin shares closed at 6 Singapore cents on Monday, down 2 Singapore cents or 25 per cent.