SINGAPORE (Feb 27): Sydney Yeung, group CEO and controlling shareholder of GSS Energy, has dropped plans to buy the key operating subsidiary of the company, Giken Sakata (S) – just over a month after the proposal was mooted.
“The Company understands that Mr Yeung intends to focus his efforts to manage the two sectors of the Group’s business in view of the challenging macro environment arising from the COVID19 virus,” states GSS Energy in an SGX filing.
Giken Sakata is a precision parts manufacturer, and GSS Energy holds a minority stake in an oil field in Indonesia, which has been struggling for years to get production going.
The company’s earnings practically come from Giken Sakata, which Yeung had wanted to buy. If the plan goes through, GSS Energy would basically be a cash company and need to acquire new businesses.
For the three months ended Sept 30 2019, GSS Energy reported earnings of $1.6 million, up 22.6% y-o-y. Revenue in the same period was down 1.8% y-o-y to $28.7 million. 
As at Sept 30 2019, the company’s net asset value was 9.84 cents per share, compared to 9.45 cents as at Dec 31 2018.
GSS Energy shares last traded at 8.9 cents.