Gallant Venture proposes to acquire 66.25% stake in Singapore-Bintan Resort Holdings for S$4.94m

GALLANT Venture is proposing to acquire 66.25 per cent of shares in Singapore-Bintan Resort Holdings (SBRH) for a total consideration of S$4.94 million from shareholders that include Keppel Land, OCBC, UOB, DBS, UOL Equity Investments and Tropical Resorts.

The remaining 33.75 per cent shares in SBRH are held by Salim Group-linked entities which are not involved in the proposed acquisition.

Gallant Venture - a developer, master planner and manager for industrial parks and resorts in Batam and Bintan - said that the company has received indications from all the SBRH-selling shareholders that they accept the company's proposal to acquire their respective stakes.

The company has valued SBRH as a whole at approximately S$7.46 million, taking into consideration SBRH's net tangible liabilities, S$20 million shareholders' loans, the related accrued interest and waiver of default interest in respect of such loans as well as the consolidation of SBRH's share of the net tangible asset value of PT Bintan Resort Cakrawala (PT BRC), a company incorporated in Indonesia.

SBRH is a special purpose vehicle established by the SBRH-selling shareholders (or their predecessors) and the Salim Group to hold an equity stake in PT BRC as its sole investment. SBRH is a single-asset investment holding company, whose only asset is shares representing 13.23 per cent in PT BRC.

PT BRC is the master planner and manager for Bintan Resort, Indonesia.

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SBRH has been loss-making since inception. As at Dec 31, 2019, it had a deficit in the shareholders' equity amounting to about S$10.9 million, and its total and current liabilities exceeded its total and current assets by approximately S$10.9 million. Based on its audited financial statements as at Dec 31, 2019, it recorded net losses of approximately S$19,000 for that financial year.

In the proposal, the entire purchase consideration will be satisfied in full by the issue of about 38.3 million new ordinary shares in the capital of Gallant Venture, representing approximately 0.70 per cent of the enlarged total number of issued shares immediately after completion of the proposed acquisition. The issue price of the consideration shares is S$0.129 per share, being the closing market price of the shares on Dec 30, 2020, which was the market day immediately preceding the date of the company's letter to the SBRH-selling shareholders setting out the proposal.

Gallant Venture's board believes that the proposed acquisition is in the interests of the company so that the group has full control over PT BRC to explore various strategic options on its investments in PT BRC so as to enhance its future value once the tourism industry recovers from Covid-19.

The proposed acquisition, if completed, is not expected to have any material impact on the net tangible assets or earnings per share of the company for the current financial year ending Dec 31, 2021.

Gallant Venture's shares closed flat at 13.6 Singapore cents at the end of trading on Monday.