The information in this paragraph is based on representations and information provided by the management of the Group.

Transcription

1 MAVERIC LTD. ACQUISITION OF KIM HENG MARINE & OILFIELD PTE LTD, KIM HENG MARITIME PTE LTD, KIM HENG TUBULARS PTE LTD, KIM HENG SHIPBUILDING & ENGINEERING PTE LTD, DARWIN OFFSHORE LOGISTICS BASE PTY LTD, DARWIN BASE WASTE PTY LTD AND ALPINE PROGRESS SHIPPING PTE LTD 1. INTRODUCTION The Board of Directors (the Board ) of Maveric Ltd. (the Company or Maveric ) is pleased to announce that the Company had on 10 December 2007 entered into a sale and purchase agreement (the Agreement ) with Messrs Tan Keng Siong Thomas, Tan Sek Khoon and Yeo Ai Tee (each a Vendor and collectively, the Vendors ) to acquire the entire issued and paid-up share capital (the Sale Shares ) of Kim Heng Marine & Oilfield Pte Ltd, Kim Heng Maritime Pte Ltd, Kim Heng Tubulars Pte Ltd, Kim Heng Shipbuilding & Engineering Pte Ltd, Darwin Offshore Logistics Base Pty Ltd, Darwin Base Waste Pty Ltd and Alpine Progress Shipping Pte Ltd (collectively known as the Group or Group Companies ) (the Acquisition ). A description of the Group Companies is set out in Section 3 of this Announcement. 2. BACKGROUND INFORMATION OF THE GROUP COMPANIES The information in this paragraph is based on representations and information provided by the management of the Group. The marine and offshore service business of the Kim Heng Group started in 1968 as a partnership with two unrelated parties under the name of Kim Heng Tugboat Company. In 1978, the partnership was dissolved and Kim Heng Marine Pte Ltd was incorporated to continue the business. In the late 1980s, Kim Heng Marine Pte Ltd expanded its business to include offshore oil and gas support activities in South East Asia. It was renamed Kim Heng Marine and Oilfield Pte Ltd in 1992 to better reflect the industries it services, namely, the marine and offshore oil and gas industries. The Group is principally involved both locally and internationally in the provision of integrated supply chain solutions to major oil companies, and onshore and offshore drilling companies. The business, assets and properties of the Group are mainly located in Singapore, with two subsidiaries in Australia. The Group owns two shipyards in Singapore specializing in offshore rig construction, offshore modules, pipe-lay barges, and other types of vessels. It also owns and operates a fleet of offshore vessels, several units of crawler cranes from 50 to 280 ton capacity to provide logistic support to onshore and offshore drilling companies. The Group also offers production support services, offshore logistics support, project management for offshore pipeline construction work, charter of marine vessels, supply of drilling, casing and equipment for various offshore platforms, supply base and procurement management. Given the Group s extensive experience since 1968, it is able to professionally serve the oil and gas industries and other various marine projects. The Group has knowledge of different disciplines and is familiar with the practicalities of exploration and production, shipping and port management, project engineering to personnel selection. With the capability and experience, the Group has embarked on a continuous development plan to invest in the state of the art technology and infrastructure to meet the fast growing requirements of the offshore oil and gas industry.

2 3. RATIONALE FOR AND BENEFITS OF THE ACQUISITION On 30 June 2006 the Company sold its entire assets and businesses. The Company is still listed on the Singapore Exchange Securities Trading Limited (the SGX-ST ) but trading is currently suspended as there is no operating business in the Company. The Board has been presented with an opportunity to acquire a new and viable business with a profitable track record which meets the SGX-ST requirements for a new listing. Upon completion of the Acquisition ( Completion ), the Company s main businesses will be that undertaken by the Group Companies. The Board is of the view that the Acquisition, if approved by the SGX-ST and the shareholders of the Company (the Shareholders ), is in the interest of the Shareholders for the following reasons: (a) Viable business for the Company: The Company will own a viable business which could satisfy the SGX-ST s requirements for the lifting of trading suspension of the Company s shares on the SGX-ST. Shareholders will be able to regain access to the Singapore capital markets through the lifting of the current trading suspension, allowing them to resume trading in the Company s shares as well as provide them with the opportunity of realising the value of their investment in the shares of the Company. (b) Acquire profitable business with credible operating and profit track record: The Group Companies are principally engaged in businesses involved in the oil and gas industry and have established an operating track record and a credible base of clients over the last 39 years. Shareholders will be provided with an opportunity to participate in the growing oil and gas industry through the Group Companies. (c) Increase market profile of the Company: The Acquisition will increase the market capitalisation of the Company significantly and lead to greater liquidity of its shares once the trading suspension is lifted. In addition, the management team of the Group Companies has extensive experience, substantial technical expertise and valuable business relationship within the oil and gas industry. The Company believes that these factors will help raise the profile of the Company and generate renewed investor interest in the shares of the Company. (d) Entry and participation in the fast growing oil and gas industry: Presently the oil and gas prices are at the top end of their historical range and the oil and gas industry is regarded as one of the fastest growing industries globally. The Acquisition will allow the Company to enter into this rapidly expanding industry and capitalise on its available capacity to provide the suite of services and product offerings of the Group Companies. In addition, the Group Companies extensive expertise in onshore and offshore drilling and production support services, offshore logistics support, project management for offshore work, charter of marine vessels and supply of equipment for various offshore works will benefit from the growing demand in the industry, which in turn will enhance Shareholder value in the Company.

3 4. PURCHASE CONSIDERATION Under the Agreement, the purchase consideration in respect of the Acquisition is the actual profit after tax of the Group, on a consolidated basis, for the financial year ended 31 December 2007 (the PAT 2007 ) multiplied by 15 (the Purchase Consideration ) and is to be satisfied in full by the allotment and issuance of such number of ordinary shares in the share capital of the Company as determined by the PAT 2007 divided by S$0.12, credited as fully paid up free from all encumbrances and together with all rights, entitlements and benefits accruing or attaching thereto and ranking pari passu in all respects with all the other existing issued shares of the Company (the Original Consideration Shares ) to the Vendors at the issue price of S$0.12 per share (the Issue Price ). The PAT 2007 shall be prepared in accordance with the Singapore Financial Reporting Standards and shall be audited in accordance with the Singapore Standard of Auditing. The audited financial statements for the year ending 31 December 2007 shall be ready by 15 April 2008, or such other date as may otherwise be agreed between the Vendors and the Company. The PAT 2007 shall exclude profits and losses made or incurred in the buying and selling of listed equities and include profits made in the selling of marine vessels and other equipment which may be used as fixed assets in the course of the Group s business. The Purchase Consideration was determined at arm s length and on a willing-buyerwilling-seller basis, based on the PAT 2007 which shall not be less than S$12,000,000. In the event that the PAT 2007 is less than S$12,000,000, the Vendors and the Company shall in good faith negotiate to reach a mutual agreement for an adjustment to the Purchase Consideration and other terms and conditions for the sale and purchase of the Sale Shares, failing which the Agreement shall ipso facto cease and the Vendors and the Company shall have no claims against each other save for antecedent breaches of any representations or undertakings and/or as provided in the Agreement. 5. CONDITIONS PRECEDENT The Acquisition is subject to certain conditions precedent including, inter alia, the following: (a) Satisfactory Due Diligence (i) (ii) The results of such legal, financial and tax due diligence investigations on the Group conducted by the Company and its advisors (including inspections of the respective audited financial accounts including, but not limited to, the income statements of the Group, all of which to be delivered to the Company upon the Company s written request to the Group at least three (3) Business Days in advance), being reasonably satisfactory to the Company. The results of such legal, financial and tax due diligence investigations to be conducted by the Vendors on the Company (based primarily on publicly available information to be delivered to the Vendors upon the latter s written request to the Company at least three (3) Business Days in advance), being reasonably satisfactory to the Vendors and/or the Group.

4 (b) Representations and Covenants The Vendors warranties and the Purchaser s warranties contained in the Agreement shall be true in all material respects on and as of the date of completion of the Acquisition (the Completion Date ) with the same force and effect as though made on and as of the Completion Date. The Vendors and the Company shall have performed and complied with all their respective covenants and agreements required by the Agreement to be performed or complied with by each of them on, or prior to, the Completion Date. (c) Consents and Approvals All consents required pursuant to the Agreement shall have been obtained without restrictions or limitations whatsoever unacceptable to the Company and the Vendors, and be in full force and effect, and the Company and the Vendors shall have been furnished with evidence reasonably satisfactory to the other party of the granting of such consents, in particular, and without limitation: (i) the approval of the Company s and M3nergy Berhad s shareholders at a general meeting and their respective boards of directors (as appropriate) in respect of: (aa) (bb) (cc) (dd) (ee) the Acquisition; the allotment and issue of the Original Consideration Shares to the Vendors in consideration therefor; the allotment and issue of new shares to the financial advisors of the Acquisition, DMG Partners Securities Pte Ltd ( DMG ) amounting to 1.4% of the Purchase Consideration, at the issue price of S$0.12, subject to a cap of S$3,000,000 which shall be issued to DMG at the same time as the issuance of the Original Consideration Shares to the Vendors; the placement of such number of shares held by the Vendors in the capital of the Company or such number of new shares by the Company or a combination of both to meet the shareholding spread and distribution requirements set out in the SGX-ST Listing Manual and such other requirements that may be imposed by the SGX-ST, where necessary (more particularly described in paragraph 7(f) of this Announcement); and the appointment of such persons, as may be designated by the Vendors in writing to the Company prior to the Completion Date, as directors of the Company with effect from such date as to be mutually agreed between the Vendors and the Company; (ii) (iii) the approval of the Company s independent Shareholders at a general meeting in respect of the waiver of the rights of the independent Shareholders of the Company to receive a mandatory offer from the Vendors (or any of them) and parties acting in concert with them pursuant to Rule 14 of the Code for all the issued and paid-up shares of the Purchaser that they do not own following the issue and allotment of the Original Consideration Shares ( Whitewash Resolution ); the receipt and non-withdrawal of the in-principal approval of the SGX- ST for amongst other things, the listing and quotation of the Original

5 Consideration Shares on the SGX-ST, provided always that if the SGX-ST shall impose any conditions on the Company, such conditions shall not be onerous and shall be reasonably acceptable to the Vendors and the Company and, if any such condition is required to be fulfilled before Completion, the fulfilment of such condition before Completion; (iv) (v) the receipt and non-withdrawal of the approval of the Securities Industry Council ( SIC ) granted to the Vendors to dispense with the requirements of Rule 14 of the Singapore Code of Take-overs and Mergers (the Code ) to make an offer to the Shareholders of the Company arising from the receipt by the Vendors of the Original Consideration Shares, subject to the conditions set out in the said SIC approval, provided always that if the SIC shall impose any conditions on the Vendors or the Company, such conditions shall not be onerous and shall be reasonably acceptable to the Vendors or the Company (as the case may be) and, if any such condition is required to be fulfilled before Completion, the fulfilment of such condition before Completion; and all other necessary consents and approvals for the transactions contemplated in the Agreement, if required and applicable, being granted and not withdrawn or revoked by third parties (including without limitation, any Government Body, stock exchange and other relevant authority in any jurisdiction) and if such consents are obtained subject to any condition(s) and where such condition(s) affect any of the parties, such condition(s) being acceptable to the party concerned and, if such condition(s) are required to be fulfilled before Completion, such condition(s) being fulfilled before Completion; (d) Purchaser remaining on SGX-ST The Company shall remain listed on SGX-ST from the date of the Agreement until the date of the transfer of the Sale Shares to the Company and the allotment and issue of the Original Consideration Shares. (e) Completion by the parties The Vendors and the Company shall on or prior to Completion Date, or such other date as may be mutually agreed by the parties, execute such further documents, agreements, deeds, and do such further acts and things, as may be required so that full effect shall be given to the provisions of the Agreement and the transactions contemplated by the Agreement. (f) Minimum Cash Balance On Completion Date, the Company shall have a minimum cash balance of S$15,000,000, free from all liabilities and less the expenses already paid by the Company pursuant to the terms of the Agreement and the Company shall provide supporting documentary evidence satisfactory to the Vendor. (g) An Irrevocable Undertaking. An irrevocable undertaking from M3nergy Berhad, being a shareholder of the Company, to vote in favour of, inter alia, the transactions contemplated by the Agreement at an extraordinary general meeting to be convened.

6 6. OTHER SALIENT TERMS (a) Future Consideration Shares The Purchaser shall issue and allot, 1 month after the issuance of the audited financial statements of the Group Companies for the financial year ending 31 December 2008, such number of consideration shares (credited as fully paid up) to the Vendors on the following basis ( Future Consideration Shares ):- No. of Future Consideration Shares = (11 x Excess Profits) divided by S$0.12 provided that the maximum number of Future Consideration Shares shall not exceed 500 million shares, Where Excess Profits = profit after tax of the Group for FY2008 ( PAT 2008 ) 1.25 x PAT (b) Working Capital of the Group The Group shall be sold with all rights and benefits accruing on 1 January 2008 but shall exclude the listed shares currently owned by the Group or the proceeds from the sale of such listed shares, either of which shall be distributed by way of dividends or by way of capital distribution to the Vendors. However, if such distribution causes the working capital of the Group to become negative, then the distribution shall be reduced to the extent that restores the said working capital to zero. (c) Compliance with SGX-ST Listing Rules The Vendors undertake to comply with listing rules of the SGX-ST after the listing and quotation of the Company s shares on the SGX-ST, and the Vendors further undertake that they shall abide by such other conditions as may be imposed by the SGX-ST for the Acquisition, provided that such conditions are not onerous and are reasonably acceptable to the Vendors. (d) Intellectual Property Rights Warranty The Vendors warrant that all of its intellectual property rights owned by the Group comprise all the intellectual property rights necessary to enable the Group to carry on its businesses fully and effectively in the ordinary course as carried on up to the present time and no such assets are used wholly or partly for any purpose other than its businesses. (e) Appointment of Key Executives Mr Tan Keng Siong Thomas and Mr Tan Sek Khoon, being key management, undertakes to enter into service agreements for an initial period of 3 years with the Company, on such terms as may be mutually agreed between Mr Tan Keng Siong Thomas, Mr Tan Sek Khoon and the board of directors of the Company. (f) Public Float Requirements The Vendors shall use their best endeavours to ensure that the public float requirements pursuant to the listing rules of the SGX-ST and such requirements as imposed by SGX-ST are met. To meet the shareholding spread and distribution requirements set out in the SGX-ST Listing Manual and such requirements as imposed by SGX-ST, the Vendors may undertake a placement of such number of shares held by them in the capital of the Company or the Company may undertake a placement by

7 way of the allotment, issue and placing out of new shares (the Compliance Placement ), or a combination of both, on such terms as may be proposed by the Vendors and approved by the board of directors the Company following Completion. 7. VERY SUBSTANTIAL ACQUISITION OR REVERSE TAKEOVER As the pro-forma combined financial performance of the Group Companies for the three most recent completed financial years are currently unavailable, the Company has assumed that the minimum PAT 2007 of the Group Companies is $12.0 million pursuant to paragraph 4 of this Announcement. For the purposes of Chapter 10 of the Listing Manual of the SGX-ST, the relativef figures for the Acquisition using the applicable bases of comparison under Rule 1006 of the SGX-ST Listing Manual are set out below:- (a) (b) (c) (d) Net asset value of the assets to be disposed of, compared with the group s net asset value Net profits (2) attributable to the assets acquired or disposed of, compared with the group s net profits Aggregate value of the consideration given or received, compared with the issuer s market capitalisation Number of equity securities issued by the issuer as consideration for an acquisition, compared with the number of equity securities previously in issue Not applicable (1) 4,386% (3) 174% (4) 885% (4)(5) Notes: (1) The transaction is an acquisition and not a disposal. (2) Under Rule 1002(3), net profit is defined as profit or loss before income tax, minority interests and extraordinary items. (3) Based on minimum profit before tax of the Group Companies of $15,000,000 (derived by utilising the minimum PAT2007 of $12.0 million as referred to under note 4 and the local statutory tax rate of 20% for the year of assessment of 2007 for the Group Companies), and the Company s latest announced consolidated profits before taxation of $342,000 in FY2006. (4) Based on (a) as the Company s shares are currently suspended, the implied market capitalization of $103.4 million derived from the pre-suspension share price of the Company of $0.61 as at 29 June 2006, a day prior to the trading suspension on 30 June 2006 and (b) value of the consideration of $180.0 million derived from the minimum PAT 2007 of $12.0 million (as defined under paragraph 4 of this Announcement) multiplied by 15. (5) Based on the total number of new shares in the Company to be issued to the Vendors (as defined under paragraph 4 of this Announcement) and the number of existing shares in the Company as at the date of the Announcement. The above assumptions are determined and utilised solely for the purposes of calculating the parameters above, as stipulated in Rule 1006 of the SGX-ST Listing Manual and for illustrating the classification of the above transaction, pursuant to Rule 1004 of the SGX-ST Listing Manual. As the relative figures under Rules 1006(b), (c) and (d) above exceed 100%, the Acquisition shall be considered a very substantial acquisition or reverse takeover as defined in Chapter 10 of the SGX-ST Listing Manual. In addition, as a result of the allotment and issue of the Consideration Shares by the Company to the Vendors, a change in control of the Company will arise immediately upon the Completion. Accordingly, Completion shall be conditional upon, inter alia, the approval of the Shareholders at a general meeting and the approval of the SGX-ST being obtained.

8 8. PROFORMA COMBINED FINANCIAL INFORMATION OF THE GROUP COMPANIES The proforma combined financial performances of the Group Companies for the three most recent completed financial years are currently unavailable for the following reasons:- (a) the financial year ends for Darwin Offshore Logistics Base Pty Ltd and Darwin Base Waste Pty Ltd are different from the other Group Companies. The management of the Group is currently in the process of obtaining the relevant financial information in order to prepare the combined financial statements of the Group Companies with coterminous year ends; and (b) each of the Group Companies have historically been held by individuals and are thus stand-alone companies. While the management accounts and audited financial statements of each of the Group Companies are available, the combined financial statements of the Group Companies must be prepared in order to determine the proforma combined financial information of the Group Companies. 9. PROFORMA FINANCIAL EFFECTS OF THE ACQUISITION The proforma financial effects of the Acquisition on the Company cannot be determined at this juncture for the reasons set out in paragraph 9 of this Announcement. 10. EXTENSION OF DELISTING DEADLINE On 7 June 2007, SGX-ST granted an extension of the suspension period of the Company under Rule 1018(2) of the Listing Manual for a period of six months from 30 June 2007 to 31 December The Company will submit a further application to SGX-ST to request for the extension of the delisting from 1 January 2008 to 31 September DIRECTORS AND CONTROLLING SHAREHOLDERS INTERESTS IN THE ACQUISITION None of the Directors nor controlling Shareholders of the Company has any interest, direct or indirect, in the Acquisition. 12. FINANCIAL ADVISER The Company has appointed DMG as its financial adviser in respect of the Acquisition. 13. LEGAL ADVISER The Company has appointed Shook Lin & Bok as its legal adviser in respect of the Acquisition. 14. INDEPENDENT FINANCIAL ADVISER The Company will appoint an independent financial adviser to the independent directors of the Company in connection with the Whitewash Resolution. 15. DIRECTORS RESPONSIBILITY STATEMENT The Directors collectively and individually accept full responsibility for the accuracy of the information given in this Announcement and confirm, after making all reasonable enquiries that to the best of their knowledge and belief, the facts stated and opinions

9 expressed herein are fair and accurate in all material respects as at the date hereof, and that there are no material facts the omission of which would make this Announcement misleading. Where information relating to the Vendors, the Group or the enlarged group has been extracted from published or otherwise available sources or is otherwise based on information obtained from the Vendors or the Group, the sole responsibility of the Directors has been to ensure that such information has been accurately and correctly extracted from these sources or, as the case may be, reflected or reproduced in this Announcement. 16. DOCUMENTS FOR INSPECTION A copy of the Agreement is available for inspection during normal business hours from 9 am to 5 pm at Maveric Ltd, 80 Raffles Place, #35-36 UOB Plaza 1, Singapore , for a period of 3 months from the date of this Announcement. 17. CIRCULAR A circular containing further details of the Acquisition and enclosing the notice of extraordinary general meeting to be convened in connection therewith will be despatched by the Company to the Shareholders in due course. BY ORDER OF THE BOARD Harris Jay Vertlieb Managing Director Maveric Ltd. 10 December 2007