Mirach Energy's unit to acquire 70% interest in Malaysian timber firm in plan to expand core business

MIRACH Energy's wholly-owned subsidiary is intending to acquire a 70 per cent equity interest in RCL Kelstar Sdn Bhd to jointly develop a multi storey project in Malaysia.

Mirach, an oil and gas exploration and production company, said on Tuesday in a Singapore Exchange filing that CPHL (HK) Limited has entered into a memorandum of understanding (MOU) with RCL.

If the proposed investment materialises, the aggregate investment value will be RM21 million. On signing of the MOU, CPHL will furnish RM2 million (approximately S$675,938) to RCL as a refundable deposit.

The company intends to seek shareholders' approval for the proposed deal at a general meeting to be convened.

RCL is a company that specialises in the timber and logging, cultivation, agriculture and plantation management businesses.

The project will be in collaboration with the Kelantan State Economic Development Corporation.

The company had in July last year announced that it plans to diversify into the property and construction business as part of its strategy to return the company to profitability.

For its third quarter results, Mirach recorded US$124,000 in net loss, up from US$975,000 in net loss a year ago. Revenue fell 71 per cent to US$58,000 for the three months ended Sept 30, 2017.

Mirach said last November that there was no revenue recognised in Q3 2017 from its exploration and production business. The Kampung Minyak oil field has also ceased production since Q2 2017.

"In addition to the two low cost housing projects in Malaysia as announced by the company on Aug 28 and Nov 1, 2017, respectively, the company is entering into this project with the intention to further strengthen its financial performance," Mirach said on Tuesday.

The proposed diversification will also be discussed at the general meeting to be held later.

Mirach last traded on Monday and closed at S$0.096.