Straits Inter Logistics buys 38% stake in Hong Kong's Banle for RM15m

November 9, 2018 | By | Reply More

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PETALING JAYA: Straits Inter Logistics Bhd is acquiring a 38% stake in Banle Energy International Ltd for RM15 million to venture into Hong Kong’s bunker oil trading market.

The group told the stock exchange today that the purchase consideration will be fully satisfied via issuance and allotment of 63.82 million new Straits shares at an issue price of 23.5 sen per share.

A conditional share sale agreement was signed with CBL (Asia) Ltd for the acquisition. The parties had in January entered into a heads of agreement (HOA) to explore potential business cooperation.

Hong Kong-based Banle is principally involved in the trading of bunker oil and the provision of marketing services. It registered a 50.9% jump in net profit to RM1.52 million for the financial year ended July 31, 2017 (FY17) from RM1.01 million a year ago.

CBL has agreed to aggregate profit guarantees of not less than US$1.65 million for FY19 and FY20.

Straits said the proposed acquisition forms part of its overall strategy to widen its geographical footprint in the new markets where the group does not have presence at this juncture.

Through the acquisition, the group said it may leverage on Banle’s existing sales and marketing network in Hong Kong to carry out its trading of oil bunkering services.

At present, the customers’ base of Banle include transportation companies and shipping companies from Germany, Taiwan, China and Singapore.

Straits expects the proposed acquisition to provide the group an additional income stream in the form of share of profit from Banle.

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