Hyflux taking 50% stake in Indonesia's PT Oasis

Singapore

SINGAPORE-LISTED Hyflux is pumping S$50 million into Indonesia-based PT Oasis for a 50 per cent stake in the manufacturer and distributor of bottled drinking water. The proposed acquisition is signed between Hyflux's wholly owned subsidiary Hyflux Consumer Products and the joint-venture partner PT Gunawan Sejahtera.

PT Oasis is a limited liability company with revenues of 700 billion Indonesian rupiah (S$73 million), growing at 36 per cent year over year, Hyflux, said in its announcement.

Citing a growing middle-class population, integrated water solutions provider Hyflux said it sees growing opportunities in the consumer segment. "PT Oasis will contribute not only to the future earnings of the group but also provide an immediate distribution platform in Indonesia for Hyflux consumer products," it said.

Hyflux will inject the first tranche of S$30 million into the joint venture once conditions of the agreement, including regulatory approval and registrations, are met. Further capital injections of S$5 million (tranche 2), S$10 million (tranche 3) and S$5million (tranche 4) are conditional respectively on PT Oasis' net profit after tax (NPAT) not being negative for FY15 and at least 90 per cent of the target of 80 billion rupiah for FY16 and of 150 billion rupiah for FY17. "Fulfilment of NPAT above target NPAT for Tranche 2, 3 and 4 are cumulative," said Hyflux, which has a put option to sell its entire 50 per cent equity at the original value if there is "any change of laws within three years from date of completion which result in material adverse effect on the business, or if PT Oasis fails to satisfy the Tranche 4 condition".

Hyflux shares closed unchanged at S$0.63 on Tuesday before the acquisition was announced.