Singapore’s Catalist-traded EMS Energy will acquire a 52.76 per cent stake in Vietnam-based Nosco Shipyard from NVS Holdings, an affiliate owned by EMS Energy chairman, and a local firm called Son Truong.
The consideration for the purchase will include issuance of new EMS shares at 0.15 Singapore cent per share, subject to its shareholders’ approval. The price represents a 93.2 per cent discount to the last traded price of the company’s shares before being suspended in late 2016.
Meanwhile, EMS said earlier this year that it planned to issue 11.06 billion new shares at $16.6 million for the stake in Nosco.
EMS said the acquisition will help it diversify into the new business of ship repair, module construction and ship-building. Its existing business is offshore and marine engineering, which continues to “face headwind in an increasingly challenging and competitive environment”, it said.
“The proposed diversification will reduce the group’s reliance on its existing business and the impact of its existing business performance on its profitability.”
Nosco recorded an unaudited net tangible assets value of more than VND400 billion (S$23.34 million).
EMS said the Vietnam-based asset could potentially resolve its financial and business viability issues, with fully operational shipyard with immediate cash flow and a new experienced management team being appointed in March 2019, coupled with sizeable demand for ship repairing.
Nosco operates a 100-hectare industrial land with a 50-year lease, of which 50 hectares are currently used for the business of ships repairing, ships and other marine assets construction and recycling. The remaining 50 hectares of land is currently vacant and is authorised for future expansion.