EMS ENERGY LIMITED Unless otherwise defined, all terms and references used herein are as defined in the announcement dated 4 May 2015 relating to the Sale and Purchase Agreement (the "Acquisition Announcement").
1. INTRODUCTION
The Board of Directors (the "Board") of EMS Energy Limited (the "Company") refers to the Acquisition
Announcement in relation to Proposed Acquisition.
The Board wishes to announce that the Vendors and the Company have on 5 June 2015 entered into a supplemental agreement (the "Supplemental Agreement") to vary the terms of the consideration payable under the Proposed Acquisition (the "Variation").
Under the previous terms of Sale and Purchase Agreement, the total Consideration of S$150,000,000 would be satisfied by:
(a) the cash payment of approximately S$25,832,000 (the "Cash Consideration") to the Vendor (and/or their designated nominees), which shall be set off against the Disposal Consideration owing by the Vendor(s) to the Koastal Group pursuant to the Restructuring Exercise; and
(b) the balance amount of S$124,168,000 shall be satisfied by the allotment and issuance of up to
359,907,246 new Consolidated Shares (the "Consideration Shares") by the Purchaser to the Vendors (and/or their designated nominees) in the proportions set out against their names in Schedule 1 to the Sale and Purchase Agreement, at a price of S$0.345 per Consideration Share.
(a) Cash component: the revised Cash Consideration shall be S$31,266,380 (the "Revised Cash
Consideration"); and
(b) Equity component: the allotment and issuance of up to 344,155,420 Consideration Shares at an issue price of S$0.345 per Consideration Share, with an aggregate issue price of S$118,733,620.
The Revised Cash Consideration shall be set-off against the Disposal Consideration and amount owing by the
Vendor(s) and/or their associates to the Koastal Group pursuant to the Restructuring Exercise.
Consequential amendments were made to the consideration adjustment formula as follows:
In the event the Independent Valuation is less than 95% of the Initial Valuation, the number of Consideration Shares to be issued by the Company to the Vendors on Completion shall be adjusted in accordance with the following formula:
Number of Consideration Shares to be issued on Completion after adjustment = (Z ÷ 143,140,000) x 150,000,000 - 31,266,380
0.345
Where "Z" is the Independent Valuation of the Target Group based on the exchange rate of US$1.00:S$1.3472 as at 23 April 2015 (Source: Bloomberg L.P.)
For the avoidance of doubt, if the Independent Valuation of the Target Group is above US$143,140,000, the number of Consideration Shares to be issued on Completion will remain unchanged.
The financial effects of the Proposed Acquisition on the NTA and earnings of the Group have been prepared based on the audited consolidated financial statements of the Group for the financial year ended 31 December
2014 ("FY2014") (being the latest available information prior to the date of this announcement) and the unaudited pro forma financial statements of the Target Group for FY2014, taking into account the varied Consideration terms. The pro forma financial effects of the Proposed Acquisitions are for illustrative purposes only and do not necessarily reflect the actual results and financial position of the enlarged group following Completion.
For the purposes of illustrating the financial effects of the Proposed Transactions, the financial effects have been prepared based on, inter alia, the following assumptions:
(a) the financial effects of the Proposed Transactions on the NTA of the Group are computed assuming that the Proposed Transactions had taken place on 31 December 2014;
(b) the financial effects of the Proposed Transactions on the earnings and earnings per Share ("EPS") of
the Group are computed assuming that the Proposed Transactions had been completed on 1 January
2014;
(c) the share consolidation of every fifteen Shares into one (1) Consolidated Share, fractional entitlements to be disregarded; and
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(d) the expenses in connection with the Proposed Transactions are disregarded for the purposes of calculating the financial effects.
NTA attributable to the equity holders of the Group as at 31
December 2014
(S$'000)
28,352 30,376 30,376 46,801
Number of Shares (or Consolidated Shares, as the case may be)
1,480,709,604 1,568,709,604 104,580,640 448,736,060
NTA per Share (or
Consolidated
Shares, as the case may be) (cents)
1.91 1.94 29.05 10.43
Group profits after
tax (S$'000)
825 825 825 15,095
Number of Shares (or Consolidated Shares, as the case may be)
1,480,709,604 1,568,709,604 104,580,640 448,736,060
EPS (cents) 0.06 0.05 0.79 3.36
1 On 28 May 2015, the Company announced the placement of 88,000,000 new ordinary shares in the capital of the Company to raise gross proceeds of S$2,024,000 ("Placement"). The Placement was completed on 3 June 2015.
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The Proposed Acquisition is governed by the rules in Chapter 10 of the Listing Manual. Based on the audited consolidated financial statements of the Group for FY2014, the relative figures of the Proposed Acquisition computed on the bases set out in Rules 1006(a) to (e) of the Listing Manual are as follows:
Rule 1006 Bases of Calculation Relative Figure (%)
(a) Net asset value of the assets to be disposed of compared with the
Group's net asset value(1)
N.A.
(b) The net profits(2) of approximately S$17,566,000 attributable to the Target Group, compared with the Group's net profits of approximately S$825,000 for FY 2014
2,129.2%
(c) The Consideration of S$150.0 million compared with the Company's
market capitalisation of approximately S$34.06 million as at 30 April
2015, being the last market day the Shares were traded on the SGX- ST immediately preceding the date the Sale and Purchase Agreement was executed(3)
440.4%
(d) The number of equity securities issued by the Company as consideration for an acquisition, compared with the number of equity securities previously in issue(4)(5)
232.4%
(e) The aggregate volume or amount of proved and probable reserves to
be disposed of, compared with the aggregate of the group's proved
and probable reserves
N.A.
(1) This is not applicable to an acquisition of assets.
(2) Under Rule 1002(3) of the Listing Manual, "net profits" means profit or loss before income tax, minority interests and extraordinary items. The net profit of the Target Group is based on unaudited pro forma financial statements for FY2014 and the net profit of the Group is based on audited consolidated financial statements for FY2014.
(3) The market capitalisation of the Company was determined by multiplying the number of total issued Shares, being
1,480,709,604 Shares (excluding treasury shares), by S$0.023 (being the volume-weighted average traded price of such Shares on 30 April 2015, being the last market day immediately preceding the date of the Sale and Purchase Agreement. (Source: Bloomberg)
(4) Based on the issue of the maximum number of 344,155,420 Consideration Shares.
(5) The number of equity securities in issue assumes that the Proposed Share Consolidation had been effected immediately after the close of trading on the last market day immediately preceding the date of the Sale and Purchase Agreement.
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As the relative figures under Rules 1006(b), 1006(c) and 1006(d) of the Listing Manual exceed 100%, and the Proposed Acquisition will not result in a change in control of the Company2, the Proposed Acquisition would constitute a very substantial acquisition under Rule 1015 of the Listing Manual.
Accordingly, the Proposed Acquisition shall be conditional upon, inter alia, the approval of the SGX-ST and the
Shareholders being obtained pursuant to Rule 1015 of the Listing Manual.
Copies of the following documents will be made available for inspection during normal business hours at the registered office of the Company at 1 Robinson Road #17-00 AIA Tower Singapore 048542, for a period of three months from the date of this announcement:
(a) the MOU;
(b) the Sale and Purchase Agreement; (c) the Valuation Report; and
(d) the Supplemental Agreement.
Shareholders are advised to exercise caution in trading their Shares as the Proposed Acquisition, the Warrants Exchange, the allotment and issuance of the Exchanged Shares and the Share Consolidation are subject to certain conditions and there is no certainty or assurance as at the date of this announcement that the Proposed Acquisition, the Warrants Exchange, the allotment and issuance of the Exchanged Shares and/or the Share Consolidation will be completed. The Company will make the necessary announcements when there are further developments on the Proposed Acquisition, the Warrants Exchange, the allotment and issuance of the Exchanged Shares and/or the Share Consolidation.
Shareholders are advised to read this announcement and any further announcements by the Company carefully. Shareholders should consult their stock brokers, bank managers, solicitors or other professional advisors if they have any doubt about the actions they should take.
The directors of the Company collectively and individually accept full responsibility for the accuracy of the information given in this announcement and confirm after making all reasonable enquiries that to the best of their knowledge and belief, this announcement constitutes full and true disclosure of all material facts about the Proposed Acquisition, the Warrants Exchange, the allotment and issuance of the Exchanged Shares, the Share Consolidation, the Company and its subsidiaries, and the directors of the Company are not aware of any facts the omission of which would make any statement in this announcement misleading. Where information in this announcement has been extracted from published or otherwise publicly available sources or obtained from a named source, the sole responsibility of the directors of the Company has been to ensure that such information has been accurately and correctly extracted from those sources and/or reproduced in this announcement in its proper form and context.
2 There is no change of control as Mr. Ting Teck Jin, one of the Vendors, is already an existing controlling shareholder of the Company as at the date of this announcement.
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By Order of the Board
EMS Energy Limited
Gwendolyn Gn Jong Yuh
Company Secretary
5 June 2015
This announcement has been prepared by the Company and its contents have been reviewed by the Company's sponsor, UOB Kay Hian Private Limited (the "Sponsor") for compliance with the relevant rules of the SGX-ST. The Sponsor has not independently verified the contents of this announcement.
This announcement has not been examined or approved by the SGX-ST and the SGX-ST assumes no responsibility for the contents of this announcement, including the correctness of any of the statements or opinions made or reports contained in this announcement.
The contact person for the Sponsor is Mr Alvin Soh, at 8 Anthony Road #01-01 Singapore 229957, telephone (65) 6590 6881.
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