Gallant Venture has proposed to acquire 66.25% of the shares in Singapore-Bintan Resort Holdings held by Keppel Land Limited, Oversea-Chinese Banking Corporation (OCBC), United Overseas Bank (UOB), DBS Bank, UOL Equity Investments and Tropical Resorts Limited for a total consideration of $4.9 million.
The purchase consideration is about 66.25% of $7.5 million, which is the value of Singapore-Bintan Resort Holdings, according to Gallant Holdings.
The valuation of the resort took into account its net tangible liabilities, $20 million shareholders’ loans, the related accrued interest and waiver of default interest, as well as the consolidation of the resort’s share of the net tangible asset (NTA) value of PT Bintan Resort Cakrawala.
The remaining 33.75% shares in Singapore-Bintan Resort Holdings are held by KMP Bincorp Investments Pte Ltd and Richbroad Investments Ltd, which are related to the Salim Group.
Both companies are not involved in the proposed acquisition.
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As at Jan 25, Gallant says the selling shareholders have indicated that they are accepting the company’s proposal to acquire their respective sale shares.
Under the contract, the purchase consideration will be satisfied fully by the issue of 38,306,923 new shares in the capital of Gallant, representing 0.7% of the enlarged total number of issued shares.
The issue price of the consideration shares is 12.9 cents per share, which is the closing market price of the shares on Dec 30, 2020.
Singapore-Bintan Resort Holdings is a private company incorporated in Singapore in 1990. It is a special purpose vehicle (SPV) established by the selling shareholders and the Salim Group to hold an equity stake in PT Bintan Resort Cakrawala as its sole investment.
It is a single-asset investment holding company, whose only asset is its shares representing 13.23% in PT Bintan Resort Cakrawala. The remaining 86.77% shares in the latter is held by Gallant Holdings.
Singapore-Bintan Resort Holdings has been loss-making since its inception.
As at Dec 31, 2019, Singapore-Bintan Resort Holdings had a deficit in the shareholders' equity amounting to approximately $10.9 million and its total and current liabilities exceeded its total and current assets by approximately $10.9 million.
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Based on its audited financial statements as at Dec 31, 2019, it recorded net losses of approximately $19,000 for the FY ended Dec 31, 2019.
Gallant says it believes the proposed acquisition will enable the group to have full control over PT Bintan Resort Cakrawala to “explore various strategic options on its investments in [the latter] as to enhance its future value once the tourism industry recovers from Covid-19”.
Shares in Gallant closed flat at 13.6 cents on Jan 25.