MMA Offshore Limited (ASX:MRM) entered into a binding share purchase agreement to acquire ten companies from Neptune Marine Services Limited (ASX:NMS), Neptune Scotland Holdings Ltd. and Neptune Asia Holdings Pte. Ltd. for AUD 18.5 million on July 23, 2019. Ten companies comprise of Neptune Asset Integrity Services Pty Ltd, Neptune Subsea Engineering Pty Ltd, Neptune Geomatics Pty Ltd, Neptune Subsea Stabilisation Pty Ltd, Neptune Diving Services Pty Ltd, Neptune Offshore Service (PNG) Ltd, Neptune Offshore Services Ltd, Neptune Subsea Engineering Ltd, Neptune Marine Pacific Pte Ltd and Neptune Subsea Stabilisation Pte Ltd. Out of total consideration, MMA Offshore pay AUD 5 million in cash and will issue 67.655000 million of common stock at an issue price of AUD 0.20 per share with an implied value between AUD 13.5 million and AUD 16.2 million. The number of consideration shares to be issued on completion will be calculated by reference to the volume weighted average share price of MMA Offshore's shares in the 30 day period ending on the date that is two business days before completion ("VWAP"). The implied value of the consideration shares will only be AUD 13.5 million if the 30-day VWAP is less than or equal to AUD 0.25. If the 30-day VWAP is equal to or greater than AUD 0.25, then the implied value of the Consideration Shares will be greater than AUD 13.5 million, but can be no higher than AUD 16.2 million. Post completion and based on the maximum number of shares to be issued, Neptune Marine Services is expected to hold no more than approximately 7.3% of MMA Offshore's issued share capital. The cash consideration has already been paid to an escrow agent as an upfront refundable deposit. The consideration is subject to certain computations and adjustments and will not be finalized until after completion of the transaction. The Cash Consideration must be held in an account for a six-month retention period. This retention amount is subject to adjustment for any post completion adjustments.

Under the terms of the transaction, Neptune Marine Services Limited will sell Neptune Asset Integrity Services Pty Ltd, Neptune Subsea Engineering Pty Ltd, Neptune Geomatics Pty Ltd, Neptune Subsea Stabilisation Pty Ltd, Neptune Diving Services Pty Ltd, and Neptune Offshore Service (PNG) Ltd. Neptune Scotland Holdings Ltd. will sell Neptune Offshore Services Ltd and Neptune Subsea Engineering Ltd whereas Neptune Asia Holdings Pte Ltd will sell Neptune Marine Pacific Pte Ltd and Neptune Subsea Stabilisation Pte Ltd. The cash consideration was funded from MMA Offshore's existing cash resources. In case of termination, each party has agreed to pay a prescribed, liquidated amount of AUD 0.2 million. The ten companies had net asset value of AUD 18.5 million as at June 30, 2019. Neptune Marine Services' Chief Executive Officer, Robin King, will continue to manage Neptune Marine Services until completion occurs, following which he will provide support to MMA Offshore during the transition period. As part of the transaction, the remaining Neptune Marine Services' management, including Acting Chief Financial Officer, David Binns, and all other employees will transfer to MMA Offshore.

Transaction is subject to the approval of shareholders of Neptune Marine Services at a general meeting expected to be held in October 2019, recommendation of the Board of Directors of Neptune Marine Services, approval of shareholders of MTQ Corporation Limited (SGX:M05) (parent of Neptune Marine Services) at a general meeting expected to be held in September 2019, approval of the SGX-ST, the deed of guarantee becoming effective, shareholders of Neptune Marine Services approving the change of Neptune Marine's name to a name that does not include the word “Neptune” or anything that looks or sounds like it or is capable of being confused with ”Neptune” or is capable of being confused with “Neptune”. Transaction is also subject to consent or approval required under or in connection with MMA Offshore's existing syndicated facility agreement has been obtained on an unconditional basis, the restructuring steps, as set out in the agreement for the purposes of ensuring that all the property, rights and assets of the entire Neptune Group's business, except only for the excluded assets and the shares in the non-transferring entities are held by a target company on completion (“Restructure”), having been undertaken and completed, and no key employee having given a notice of resignation, or been issued with any notice of termination, in respect of their employment with a member of the Neptune Group between the date of the agreement and on the completion date. The issuance of consideration shares will not require shareholder approval. The Directors of Neptune Marine Services unanimously recommended the transaction. If the conditions are not satisfied or waived on or before November 30, 2019, or such later date as agreed by the parties in writing, then Neptune Marine or MMA Offshore may at any time after that date and before satisfaction or waiver of those conditions, terminate the agreement. Pending the deployment of the cash consideration, and subject to the requirement to maintain the AUD 5 million cash balance during the retention period, this may be deposited by Neptune Marine Services with banks and/or financial institutions, invested in short term money markets and/or marketable securities, or used for any other purpose on a short term basis, as the Directors may deem appropriate in the interests of Neptune Marine Services. it is the current intention of Neptune Marine's Directors that, subject to receipt of necessary shareholder approvals and subject to applicable law and regulatory requirements, the consideration shares will be distributed pro-rata to shareholders of Neptune Marine as soon as practicable following completion. As of September 13, 2019, Board of MTQ Corporation Limited is of the opinion that the transaction is in the best interests of the company and recommends that the shareholders vote in favor of the transaction at the EGM to be held on October 1, 2019. On October 1, 2019, shareholders of MTQ Corporation Limited approved the transaction. On October 21, 2019, shareholders of Neptune Marine Services Limited approved the transaction. Completion is expected to occur by October 2019 or November 2019. As of October 1, 2019, transaction is expected to be completed by early November 2019. As of October 21, 2019, transaction is expected to be completed by early to mid-November 2019. The cash and share consideration will be distributed pro-rata to shareholders of Neptune Marine. In the event the cash consideration is distributed, the amount received will be used to fund future business expansions, investments and acquisitions when suitable opportunities arise and general working capital requirements. The transaction is expected to contribute to MMA Offshore's earnings. Transaction is expected to increase the net tangible assets of Neptune Marine Services from SGD 0.302 (AUD 0.316) to SGD SGD 0.308 (AUD 0.322), reduce the loss per share of Neptune Marine Services from SGD 0.024 (AUD 0.025) to SGD 0.014 (AUD 0.015), and bring the gearing ratio of Neptune Marine Services from 3% to not applicable. Rajah & Tann Singapore LLP acted as escrow agent in the transaction.