Propel Global Berhad (Bursa: MAIN, PGB, 0091), provider of oil and gas supporting services such as well services , engineering, procurement, construction and commissioning (EPCC) services, maintenance of heating, ventilation and air-conditioning (HVAC) systems as well as downstream specialty chemicals to the oil and gas (O&G) industry, today announced that the Company has entered into a conditional share sale agreement to buy a 51% stake in Best Wide Engineering (M) Sdn. Bhd. (BWE) for RM7.82 million.
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| Ms. Angeline Lee, Group Chief Executive Officer of Propel Global |
BWE provides engineering and technical works for the O&G industry through engineering, procurement, construction and commissioning (EPCC) of new plants and plant modification works; design and supply of skidded process systems and engineered equipment for onshore plants and offshore platforms and; project management and engineering consultancy services. Its shareholders and directors are Azizi bin Alias (Azizi) with 45.8% equity interest, Jasniazrin Shah Bin Mohd Hata (Jasniazrin) with 44.2% equity interest and Tan Siew Lee (Siew Lee) with 10.0% equity interest.
Propel Global is acquiring the 51% stake from Azizi, who is selling his entire equity interest, and Siew Lee, who is selling 5.2% of his holdings. As part of the share sale agreement, Propel Global has also entered into a put and call option agreement with Jasniazrin and Siew Lee that requires the Company to purchase up to 49.0% of the remaining equity interest in BWE from them and, Jasniazrin and Siew Lee will grant Propel Global the right during the call option period that requires them to sell up to 34.0% equity interest in BWE to the Company.
BWE, which has 15 ongoing contracts with total unbilled contract value of RM21.8 million expected to be realised over the next three years, is guaranteeing a profit of RM2.4 million and RM2.6 million in profit after tax (PAT) for the financial year ended 30 November (FYE) 2022 and FYE 2023 respectively. BWE reported revenue of RM18.6 million and PAT of RM178,000 for FYE2019; RM19.0 million revenue and RM395,000 PAT for FYE2020 and; RM38.5 million revenue and RM2.3 million PAT for FYE2021. Currently, BWE has a tender book of RM41.3 million.
Ms. Angeline Lee, Group Chief Executive Officer of Propel Global said, “The acquisition is in line with the Group’s strategy to grow the O&G business through expanding our offerings and enhancing market presence as an O&G engineering services provider. BWE’s expertise and experience in EPCC works complements the Group’s existing O&G business.”
“We believe that combining the core competencies of BWE with the Group would enable the latter to bundle a wider range of service offerings to its customers and provide it with a competitive edge over competitors. The Group will also be able to tap into BWE’s existing customer base for cross-marketing opportunities and additional revenue stream.”
Propel Global Berhad: 0091 [BURSA: PGB], https://www.propelglobal.com.my/
Topic: Press release summary