MEDIA RELEASE
Koh Brothers Group to acquire substantial stake in
Metax Engineering
SINGAPORE, 25 October 2012
– SGX-Catalist listed Metax Engineering
Corporation Limited (“Metax Engineering”, the “Company” and together with its
subsidiaries, the “Group”), a home-grown environmental engineering company,
today announced that it has signed a subscription agreement (“Subscription
Agreement”) with Koh Brothers Group Limited (the “KB Group”).
Under the Subscription Agreement, the Company will issue 155 million new ordinary
shares (“Subscription Shares”) to KB Group or its nominee at the issue price of
S$0.053 (“Issue Price”) for an aggregate consideration of S$8.215 million, and 165
million free detachable, non-transferable and non-listed warrants (“Warrants”) with
each warrant carrying the right to subscribe for one new ordinary share (“Warrant
Share”) at an exercise price of S$0.053 (“Exercise Price”) for each Warrant Share for
nil consideration (collectively, the “Proposed Subscription”).
The Issue Price and Exercise Price were determined after an arm’s length
negotiation between the Company and the KB Group
About the KB Group
The KB Group was listed on the Main Board of the Singapore Exchange Securities
Trading Limited (the “SGX-ST”) in August 1994. It is a well-established construction,
property development and specialist engineering solutions provider.
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The KB Group provides comprehensive construction services with more than 30
subsidiaries, joint ventures and associated companies spread over Singapore, China,
Indonesia and Malaysia. Over the years, the KB Group has undertaken numerous
civil engineering and building projects with its A1 grading by the Building and
Construction Authority (“BCA”). It is currently the highest grade for contractors'
registration in this category, allowing it to tender for public sector construction
projects of unlimited value. It has also developed a name for itself as a niche real
estate developer, with an established reputation for quality and innovative
residences. The KB Group is involved in the business areas of construction, building
materials, real estate and leisure and hospitality. The KB Group was introduced to
the Company as a subscriber by Mr Lee Thiam Seng.
Subscription Shares
The Issue Price represents a discount of approximately 37.9% to the volume
weighted average price (“VWAP”) of S$0.0853 of the shares of the Company
(“Shares”) on the SGX-ST on 19 October 2012
1. The Issue Price also represents a
discount of approximately 31.5% to the VWAP of S$0.0774 of the Shares for the
month up to 19 October 2012.
The 155 million Subscription Shares represent approximately 69.4% of the issued
share capital of the Company as at the date of the announcement
2. On an enlarged
basis immediately after the Subscription Shares are issued
3, the KB Group will have
a 41.0% stake in Metax Engineering before the exercise of the Warrants, assuming
no other share issues.
Warrants
Each warrant may be exercised at any time within a period of three years after the
date of issue and the Exercise Price for each Warrant represents a discount of
approximately 37.9% to the VWAP of S$0.0853 of the shares of the Company
1
The last market day on which the Shares were traded prior to the signing of the Subscription Agreement
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Issued capital of the Company of 223,408,576 Shares
3
Including the 155 million Subscription Shares, the share capital of the Company is 378,408,576 Shares
3
(“Shares”) on the SGX-ST on 19 October 2012
4. The Exercise Price also represents
a discount of approximately 31.5% to the VWAP of S$0.0774 of the Shares for the
month up to 19 October 2012.
Assuming the Warrants are fully subscribed and exercised, and the 165 million
Warrant Shares
5 subsequently allotted and issued (with no additional Warrants
which may be issued pursuant to applicable adjustment events of the terms and
conditions of the Warrants), the 165 million Warrant Shares, together with the
Subscription Shares, represent an aggregate stake of approximately 58.9% in the
enlarged issued share capital of the Company
6 for the KB Group.
The Exercise Price and/or the number of Warrants held by the warrantholder are
subject to adjustment upon certain events specified in the terms and conditions of
the Warrants, including in the event of rights, bonus or other capitalisation issues.
Any adjustment will be subject to the approval of the SGX-ST and agreed by the
Company, its auditors, and its Approved Bank (as defined in the Subscription
Agreement).
Use of Proceeds
The net proceeds from the issue of the Subscription Shares and the exercise of the
Warrants is estimated to be approximately S$7.9 million and S$8.7 million
respectively. Out of the net proceeds from the Subscription Shares, 40% will be used
for business growth and investment opportunities while the remaining 60% will be
used for general working capital purposes. Additionally, 100% of the net proceeds
from the exercise of the Warrants will be used for general working capital purposes.
Notwithstanding that the working capital position of the Company is sufficient for its
operations, Metax Engineering intends to undertake the Proposed Subscription to
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The last market day on which the Shares were traded prior to the signing of the Subscription Agreement
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The Warrant Shares shall rank pari passu in all respects with and carry all rights similar to the then existing
Shares, except that they will not rank for any dividend, right, allotment or other distributions, the record date
for which falls on or before the exercise date
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Including the 155 million Subscription Shares and 165 million Warrant Shares, the share capital of the
Company is 543,408,576 Shares
4
strengthen its cash position and allow it to be less reliant on external sources of
funding, including drawing down on its debt and other credit facilities, as well as to
provide additional resources to bid for more capital intensive projects which it may
want to secure.
Rationale for Proposed Subscription
The Board of Directors of the Company believe that the Proposed Subscription will
strengthen the Group’s financial position by increasing its capital base significantly
and improving cash flow. These additional resources will help the Group to bid for
more capital-intensive projects and pursue potential growth opportunities.
The Company believes that a strong strategic investor in the KB Group can assist in
the development of the Company’s strategic direction and business with a view to
enhancing shareholder value. The Group will also have the opportunity to tap on the
capabilities of the KB Group and leverage on their expertise, experience, resources
and reputation.
The KB Group has an established track record in construction and infrastructure
projects which include the Marina Barrage, Punggol Waterway and the Geylang
River Makeover projects. Their project experience will be beneficial to the Group in
any future collaborations and partnerships, and both parties will also benefit from
realising synergies of efficiencies.
Commenting on the deal, Mr Tan Tze Wen, the Managing Director of Metax
Engineering said:
“We welcome the KB Group as a strategic investor in Metax as it
will lead to a synergistic partnership. Their investment will help strengthen our
financial position and will avail to us their management expertise, experience and
resources so that we can work closer together to pursue new projects in Singapore
and the region.”
The Company will seek shareholders’ approval at an Extraordinary General Meeting
(“EGM”) to be convened for a specific issue mandate to issue and subsequently allot
the Subscription Shares, Warrants and Warrants Shares (upon exercise of the
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Warrants). The Subscriber and parties acting in concert with it will also be seeking
from the Securities Industry Council a waiver of their obligation to make a mandatory
general offer (“Whitewash Waiver”) under Rule 14 of the Singapore Code on Takeovers
and Mergers. Once the Whitewash Waiver has been obtained, the Company
will appoint an independent financial adviser for the purposes of advising the
independent shareholders of the Company on the passing of a whitewash resolution
by the independent shareholders by way of a poll for the waiver of their right to
receive a mandatory general offer from the Subscriber and/or parties acting in
concert with it as a result of or in connection with the Proposed Subscription.
In addition to the above, the completion of the Proposed Subscription is also
conditional upon other conditions precedent set out in the Subscription Agreement
(Please refer to the SGXNet announcement of the same date for the said conditions).
Note: Shareholders and potential investors should exercise caution when
trading in Shares of the Company, and where in doubt as to the action they
should take, they should consult their financial, tax or other professional
adviser immediately. This media release is also meant to be read in
conjunction with the Company’s SGX announcement dated 25 October 2012,
copies of which are currently available on
http://www.sgx.com
-End-
Issued on behalf of Metax Engineering Corporation Limited by
Cogent Communications Pte Ltd
Tel: (65) 6323-1060, Fax: (65) 6222-1210
For enquiries please contact:
Mr Gerald Woon,
woon@cogentcomms.com (DID: +65 6323 1051; Mobile: +65 9694 8364)
Ms Shirley Wong,
shirley@cogentcomms.com (DID: +65 6323 1193; Mobile: +65 9752 2269)
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About Metax Engineering Corporation Limited
Listed on the Singapore Exchange (SGX) in 2006, Metax Engineering Corporation Limited
(“Metax Engineering”) is an environmental engineering company that provides engineering,
procurement and construction (“EPC”) services for water and wastewater treatment and
hydro-engineering projects. In 2008, Metax extended its EPC business into the palm oil
refining industry with the acquisition of WS Bioengineering Pte Ltd (“WS Bio”).
Metax Engineering was incorporated in Singapore in 1975 and has accumulated over 36
years of experience providing EPC services for water and wastewater treatment projects as
well as hydro-engineering projects thus far. It started expansion into the Asia-Pacific region
in 1985. Today, its principal market is in South East Asia and its projects come from both
public and private sectors.
WS Bio is a Singapore-incorporated company whose principal subsidiary, Oiltek Sendirian
Berhad (“Oiltek”), was incorporated in Malaysia and is a process engineering company
specialising in a full range of conventional edible oil process plants, including refinery,
fractionation plant, neutralisation, hydrogenation plant, winterisation, interesterification,
margarine and shortening, specialty fat, PKO fractionation and refining, etc. In addition,
Oiltek also supplies Biodiesel, pre-treatment and winter fuel plants. Moving up the palm oil
refining value chain, Oiltek also formed a joint venture company, Oiltek Nova Bioenergy Sdh,
Bhd., (“Oiltek Nova”) with Novaviro Technology Sdn. Bhd., in June 2010 to design, build and
supply biogas recovery systems to palm oil mill effluent (“POME”) plants in Malaysia and
Indonesia. The Group foresees opportunities in this emerging technology and will continue to
explore potential opportunities in biogas recovery actively.
Metax Engineering was awarded the ISO 9001:2000 certification since 2001 as a testimony
of its ability to deliver quality services and products. It also attained ME11 L6 grading by the
Singapore Building and Construction Authority to tender for Singapore government contracts
of unlimited value.
For more information, please visit Metax Engineering’s website
http://www.metax.com
This press release has been prepared by the Company and its contents have been reviewed by the Company's
Sponsor, Stamford Corporate Services Pte Ltd, for compliance with the relevant rules of the Singapore Exchange
Securities Trading Limited (the “
Exchange”). The Company's Sponsor has not independently verified the
contents of this press release.
This press release has not been examined or approved by the Exchange and the Exchange assumes no
responsibility for the contents of this press release including the correctness of any of the statements or opinions
made or reports contained in this press release.
The contact person for the Sponsor is Mr Ng Joo Khin:
Telephone number: 6389 3000 Email: jookhin.ng@stamfordlaw.com.sg
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