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Magnus buys additional 21.3% stake in indebted unit Flagship
MAGNUS Energy Group has bought an additional 21.3 per cent stake in loss-making and indebted waste management subsidiary Flagship Ecosystem for S$1 from the subsidiary's founder and other existing shareholders.
Flagship lost S$0.74 million in the year ended March 31, 2017, and was sitting on net liabilities of S$0.21 million, including S$0.13 million owed to selling founder Vernon Khoo Tiam Hock. As part of the deal, Mr Khoo is forgiving half, or about $65,000, of the debt owed to him.
The acquisition, which will raise Magnus's stake in Flagship to 81.3 per cent from 60 per cent, will reduce Magnus's net asset value by S$40,000.
Magnus made its initial investment of S$1 million in Flagship in 2015. The target sales pipeline of US$5.8 million given at that time has not materialised due to a scaling back of oilfield activities in Indonesia, Magnus said. As a result, Magnus's initial investment has been depleted.
The company said it continues to look for sales opportunities, including possible tie-ups to provide waste management services in Singapore.