EMS Energy said its 20 per cent-owned associated company Oilfield Services and Supplies (OSS) has begun the pre-admission process for a planned initial public offering on the Catalist board of the Singapore Exchange (SGX).
OSS is an oil and gas contractor that specialises in downhole drilling products and precision machining and drilling services, said EMS, itself an oil and gas contractor.
EMS held a 60 per cent stake in OSS before selling a 40 per cent stake to Ong See Kong in a deal that was completed on Feb 25, 2013. One condition for the sale was that Mr Ong had to seek to list OSS within three years.
EMS said that it is entitled to subscribe for new shares in OSS in proportion to its 20 per cent shareholding if the listing takes place within the agreed three-year period. But if OSS is not listed by then, EMS may sell its remaining stake in OSS to Mr Ong or buy back its 40 per cent stake at a price to be determined based on three times of OSS' net asset valuation as at July 31, 2012.
EMS shares closed at 35 Singapore cents on Tuesday before the announcement.
An earlier version of this story said that EMS Energy held a 60 per cent stake in Oilfield Services and Supplies (OSS) before selling a 40 per cent stake, and that EMS may buy back its stake based on OSS's net asset valuation if a listing is not achieved by a February 2016 deadline, based on EMS's Dec 1 announcement. EMS has corrected those details, and will be issuing a clarification announcement.