New Silkroutes Group Sells its Energy Unit for US$10 Million

Source Press Release
Company TK Energy Limited 
Tags Corporate Deals, Deals, Oil Services, Refining & Marketing Activities
Date March 25, 2019

- Disposal of International Energy will transform NSG to a total healthcare group
- NSG will reorganise its capital structure to position itself for dividend payments

New Silkroutes Group Limited ("NSG", or the "Company" and together with its subsidiaries, the "Group") today announced that its wholly-owned subsidiary, New Silkroutes Capital Pte. Ltd, has signed a share sale and purchase agreement with TK Energy Limited for the disposal of the Company's entire shareholding interests in International Energy Group Pte. Ltd. ("IEG") for US$10,000,000 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 IEG. In connection with the disposal, the Purchaser will make available to NSG a loan of US$10,000,000, which will be deemed repaid in full when the disposal is completed.

The disposal is subject to certain conditions, including the approvals from the SGX-ST and shareholders. Thereafter, IEG 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 IEG, credit facilities of up to US$250,000,000 of which an initial loan of US$50,000,000 will be advanced to IEG, 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 US$10,000,000 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, NSG's Chief Executive Officer, said: "We have secured a financially strong strategic buyer for IEG 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, NSG has plans to resolve the issue of longstanding negative retained earnings with capital reorganisation. After this exercise, NSG will have a more efficient capital structure, and will be well positioned to start dividend payments, thereby improving shareholders' return on equity."

This Media Release is to be read together with New Silkroutes Group Limited's announcement dated 25 March 2019.

Source: EvaluateEnergy® ©2020 EvaluateEnergy Ltd