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KTL Global buys 20% stake in Korean rigging equipment firm
MAINBOARD-LISTED oil and gas company KTL Global on Thursday said that it will acquire a 20 per cent stake in Korean rigging equipment company Dae Kwang for US$5 million, to "accelerate its push into the Korean offshore and marine industry".
KTL Global said it intends to leverage Dae Kwang's network and customer base to pursue accelerated growth through the provision of heavy lift slings and managed services - which "typically offer higher gross margins".
In addition, Dae Kwang's new facility that is expected to be completed by end-2015 will allow the group to take on larger-scale, higher-value projects, said KTL Global.
Said Wilson Tan, chief executive officer of KTL Global: "Korea is a major shipbuilding market with significant presence in the global offshore and marine sector. By taking a strategic stake in a well-established player in the ropes and rigging sector, we will gain a major foothold in Korea which will also serve as a springboard to our expansion in North Asia."
The acquisition sum will be settled through two cash tranches of US$300,000 and US$3.4 million respectively, as well as via the issue of new KTL Global shares valued at US$1.3 million, said the company.