Moya unit signs agreement to buy Indonesian water treatment player for S$24.7m

MOYA Indonesia Holdings, a wholly owned unit of Catalist-listed Moya Asia, has inked a conditional agreement to fully acquire Obor Group, which is involved in water treatment in Indonesia, for S$24.7 million in cash. 

In a bourse filing on Monday, Moya said that Obor develops and operates water treatment facilities, alongside supplying bulk water to municipal water companies in Banten Province, Indonesia. 

Obor itself is a Singapore-incorporated entity, with a 73.25 per cent stake in the Indonesia-incorporated entity Tanah Alam Makmur (TAM). Prior to acquiring the TAM stake in June 2019, Obor was a dormant company. 

The net profit attributable to the sale shares of Obor after tax is S$1.64 million for FY2018 ended December, and S$2.49 million for the first nine months of FY2019. 

The sale shares had a negative net tangible asset value of 57.5 trillion rupiah (S$5.42 million) as of end-2018. But as of end-September this year, it had a book value of about S$4.07 million. Moya has commissioned an independent valuation of the sale shares. 

Moya said that the acquisition is synergistic as Obor is in a similar business, enabling both companies to integrate their operations and supply chains. The greater economies of scale can improve the efficiency and profitability of Moya, the company said. 

The purchase is also in line with Moya's long-term growth strategy, which involves the purchase of a portfolio of assets to expand its production capacity and reach in the water business. 

"With this, the company will be able to multiply the asset base of the enlarged group and widen its shareholder base, hence attracting more interest from the investment community focused on the water infrastructure sector," Moya added in the filing.

Shares of Moya closed at S$0.076 on Monday, up 2.7 per cent.