P5 Capital to acquire 51% stake in GashubUnited Utility for S$12.5m

P5 Capital 5AI : 5AI 0% announced on Friday (Dec 31) that it has entered into a sale and purchase agreement with GashubUnited Holdings to purchase a 51 per cent stake in GashubUnited Utility for about S$12.5 million, depending on the final valuation of the company.

In its bourse filing, the Catalist-listed manufacturer of electrical switchboards and generator control panels as well as automation and lighting provider said that the acquisition is in line with the group's desire to diversify its business and unlock additional streams of income.

Furthermore, the acquisition allows the group to grow and venture into the energy and natural gas related business, which has seen increasing demand in the region.

GashubUnited Utility specialises in LNG distribution and helps companies replace existing fuel sources such as diesel and fuel oil. Notably, it was also a finalist in Emerging Enterprise Award 2021, which is jointly presented by The Business Times and OCBC Bank.

The company said that the purchase consideration was arrived at on a willing-buyer, willing-seller basis and makes reference to S$22.5 million that GashubUnited Utility is valued at. Chay Corporate Advisory will determine the final valuation of GashubUnited Utility and set out its formal valuation report within the next 3 months.

Under the agreement, P5 capital will issue shares to GashubUnited Holdings at S$0.0305. At the current purchase consideration, the company will issue 409.7 million shares to GashubUnited Holdings, representing about 37.27 per cent of the enlarged issued and paid-up shares in the capital of the company.

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The completion will only be fulfilled after a number of conditions are met, including the issue of opinion of the audit committee of the company and the opinion of independent financial adviser Provenance Capital, as well as approval of shareholders at an extraordinary general meeting.

If the acquisition had been completed on Mar 31, 2021, the pro-forma net tangible assets per share would have fallen to S$1.05, from S$1.88.

Had the acquisition been completed on April 1, 2020, the pro-forma net loss would also have increased to S$3.8 million, from S$3.2 million.

Shares of P5 Capital closed flat at S$0.029 on Friday, before the announcement was made.

READ MORE: GashubUnited Utility helps companies reduce their CO2 emissions with LNG