Independent lubricants manufacturer United Global says its wholly-owned subsidiary, United Supply Chain (USC), has entered into a joint venture (JV) agreement with Latitude Shipping to form Latitude United Shipping (LUS) on Jan 26.

Under the terms of the agreement, USC will own a 45% stake, while the remaining 55% stake will be owned by Latitude Shipping.

Following that, the issued and paid-up share capital of LUS will be increased from US$100 ($132.69) to US$4.5 million.

On the same day, USC, Latitude Shipping and LUS have entered into a sale and purchase agreement (SPA), where LUS is acquiring Latitude Shipping’s 49% stake in PT Latitude Inti Mitra Abadi (PT LIMA) for a consideration of US$3.8 million.

Of this, some US$2.5 million will be paid by 2.5 million new shares in LUS to Latitude Shipping. The balance of US$1.3 million will be paid in cash.

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PT LIMA is a logistics company providing maritime transport services in Indonesia and Malaysia. It owns five sets of tugboats and barges and one unit of container carrier vessel.

The remaining 51% in PT LIMA is held by PT Pelayaran Inti Sejahtera Maju (PT PISM).

Edy Wiranto, United Global’s non-executive chairman owns 86.01% in the shares of PT PISM, which makes the latter an “interested person” under the Catalist rules.

“The acquisition is a win-win for both United Global and Latitude Shipping. On one hand, we will be able to gain access to Latitude Shipping’s expertise and experience in the maritime transport sector, and on the other hand, Latitude Shipping will be able to tap on United Global’s connections to business opportunities in Singapore, Indonesia and the region,” says Jacky Tan, the CEO of United Global.

“We believe that this will enable the group to diversify our revenue streams, expand into other sustainable, long-term businesses, and reap new growth opportunities in other industries,” Tan adds.

Shares in United Global closed flat at 41 cents on Jan 26.