United Global enters Australia joint venture

Singapore

CATALIST-LISTED United Global has entered into a joint-venture agreement that will see it involved in the importation and distribution of lubricant products in Australia.

United Global, a Singapore-based lubricant manufacturer and trader, said on Thursday that its wholly owned subsidiary, United Oil Company Pte Ltd, has entered into a shareholders' agreement with Australian companies, PFR Management Pty Ltd and DP United Pty Ltd, to incorporate a joint-venture (JV) company in Australia.

The JV company will be incorporated with an initial paid-up capital of A$100,000 (S$100,572). United Oil will hold a 35 per cent stake, while PFR and DP United will hold 55 per cent and 10 per cent, respectively.

The principal activity of the joint-venture company will be the importation and distribution of lubricant products manufactured by United Oil in Australia.

United Global said it believes this joint venture would allow the group to increase its presence in Australia, and enable it to have greater access and first-hand knowledge of the Australia market.

It said that PFR will provide the customer network in Australia for the JV company to tap, while DP United will bring its extensive sales experience in Australia.

Both PFR and DP United will be involved in the operations, marketing activities and management of the distribution network of the products of the JV company.

United Oil will supply the lubricants to the JV company to distribute in Australia.

United Global added that DP United is an associate of David Kang, who is an employee of its representative office in Sydney.

United Global's investment in the JV company of A$35,000 will be paid in cash and funded through the group's internal resources. It does not expect the investment to have any material impact on the net tangible assets per share or earnings per share of the group for the current financial year ending Dec 31, 2018.

In related news, United Global also announced on Thursday that Pheim Asset Management (Asia) Pte Ltd and Pheim Asset Management Sdn Bhd have agreed to purchase a total of 15 million United Global shares - representing approximately 4.7 per cent of the company - from its former non-executive chairman and controlling shareholder, Mr Wiranto, at S$0.41 per share.

It said the transaction price represents a discount of approximately 2.4 per cent to the volume weighted average price of S$0.42 for trades done in United Global's shares on March 26, the last trading day on which the married deal was carried out.

Following the transaction, Mr Wiranto will retain about 126 million shares, or 39.8 per cent of the company's total issued share capital.