OEL (Holdings) 584 has proposed to acquire a 70% stake in Quest Asia for a consideration of $450,000.
The company’s wholly-owned subsidiary, AJJ Healthcare Management, entered into a definitive sale and purchase agreement (SPA) with Quest Asia’s shareholders, Chua June Gay and Wang Limei for the purchase on June 16.
Quest Asia is in the business of wholesale of medical, professional, scientific and precision diagnostic equipment. As at June 16, it has an existing issued and paid-up capital of $500,000 represented by 500,000 ordinary shares. The shares are entirely held by Chua and Wang.
Of the 500,000 shares, OEL will purchase 350,000 of them. The purchase will see Chua selling 260,750 shares or a 52.15% stake in the company while Wang will sell 89,250 shares representing a 17.85% stake.
Following the acquisition, Chua will hold a 22.35% stake in Quest while Wang’s stake will be reduced to 7.65%.
For the FY2022 ended Dec 31, 2022, Quest Asia has a normalised net profit before tax of $111,144. The normalised net profit before tax attributable to the sale shares was approximately $77,801. For the same period, Quest’s normalised book value and normalised net tangible asset value of the are both approximately $535,281.
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According to OEL, the proposed acquisition may “create business synergies” to enhance the capabilities and resources available to the enlarged group.
The acquisition is slated to be completed on or within 14 days after the fulfilment or waiver of the last condition in the SPA. Under the SPA, one of the conditions is that Quest will have to have a total cash balance of at least $100,000 in its bank account.
Upon the completion of the acquisition, OEL’s net tangible assets (NTA) per share will rise to 0.17 cents from 0.13 cents previously.
Shares in OEL closed flat at 0.6 cents on June 16.
