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Advanced Holdings cuts acquisition of Agricore to 12.25% from 100%
ADVANCED Holdings announced on Friday morning that it has downsized its acquisition of Agricore Global Pte Ltd from 100 per cent of its share capital to 12.25 per cent.
The company said it has decided to take a minority stake in palm oil cultivator Agricore rather than conduct a full takeover in view of commercial considerations, and will continue to focus on its existing core business of providing engineering services and equipment. After negotiating with seller Vertex DG, Advanced entered into a conditional share purchase agreement for the revised acquisition amount on Oct 18.
The previous sale and purchase agreement for Agricore's entire issued and paid-up share capital has been allowed to lapse on the long stop date of Oct 12.
"The board believes that the restructured acquisition will provide an opportunity for the company to venture into a new business area that has good potential for growth," Advanced said.
"Accordingly, the restructured acquisition would allow the company to diversify from the existing industries that it serves, and will therefore limit its exposure to risks relating to the prolonged uncertainty of external economic factors affecting its industry, and help to diversify its revenue streams."
It intends to explore other forms of long-term collaboration with Agricore and leverage potential commercial, operational and cost synergies between the two companies.
Following the announcement, Advanced requested for the trading halt on its shares to be lifted.