NSL eyes share swop for 30% interest in German engineering group

A UNIT of the former NatSteel is eyeing a share swop with German mechanical engineering group Salzgitter Maschinenbau.

NSL Limited said on Tuesday that its NSL Engineering Holdings unit had inked a deal the day before to take a roughly 30 per cent stake in the enlarged share capital of Salzgitter Maschinenbau with the issue of 2.31 million new shares.

NSL Engineering would, on its part, give Salzgitter Maschinenbau its entire one-third interest in Peiner SMAG Lifting Technologies, under the terms of the contribution agreement.

Upon completion of the deal, that company would then become a wholly-owned subsidiary of Salzgitter Maschinenbau.

Peiner SMAG Lifting Technologies manufactures bulk and container lifting accessories. It also deals in grabs, which are used for loading and unloading bulk goods from freighters, and spreaders, which lift containers.

NSL - which has businesses in precast and prefabricated bathroom units and environmental services - said that the proposed share swop will give it access to a wider portfolio of European engineering companies involved in underground mining, drilling and antenna masts.

Also, the share swop "will allow for greater synergies and value creation" within the Salzgitter Maschinenbau group, it added, in its Singapore Exchange filing.

NSL said that, based on its financial statements for the nine months to Sept 30, 2017, the attributable net asset value of its 500,000 shares in Peiner SMAG Lifting Technologies is around S$45.6 million, while the net loss before income tax, non-controlling interests and exceptional items attributable to the shares is about S$300,000 for the nine months.

Based on its carrying value, the estimated gain on the disposal is roughly S$300,000, added NSL.

NSL's consideration shares in Salzgitter Maschinenbau will come at an issue price of one euro (S$1.63) apiece.

If the value of the shares being disposed of exceeds the amount at which the consideration shares are issued, the difference will go towards Salzgitter Maschinenbau's capital reserves.

The completion of the deal is subject to several conditions, such as Salzgitter Maschinenbau completing an internal share buyback exercise and redemption to cut its share capital from six million euros to 5.4 million euros.

The German group will also need to have approval, from an extraordinary general meeting, for both the capital increase and the addition of NSL executive director and chief operating officer Low Chin Nam, among others, to its supervisory board.

All the conditions for the deal must be met by May 31.