SINGAPORE (June 16): PEC, the plant and terminal engineering specialist announced that it has entered into a sale and purchase agreement with Sinopec Nanjing and Sinopec Luoyang on Monday.
Under the agreement, PEC will acquire 40% of the total equity interest in its existing subsidiary Huizhou Tianxin Petrochemical Engineering for a total cash consideration of RMB37.5 million (S$7.4 million). Of the 40%, 30% was held by Sinopec Nanjing, and 10% by Sinopec Luoyang.
Following the completion of the acquisition, Tianxin, a Sino-foreign joint venture company established in China between PEC, Sinopec Nanjing, and Sinopec Luoyang, will be a wholly-owned subsidiary of PEC.
As at June 16, Tianxin has a registered capital of RMB15 million.
Based on the latest unaudited financial statements for the six months ended Dec 31, 2019, Tianxin has a total net asset value (NAV) of RMB73.2 million.
Under the agreement, the acquisition will have to be completed within 60 days as of June 15.
According to a filing on SGX, PEC says that it is undertaking the acquisition to acquire the remaining stake in Tianxin as the duration of the joint venture, which was established on Oct 11, 2005, had expired.
Following the acquisition, PEC intends to continue Tianxin's business in the long-term, and there are no plans to introduce any major changes to its business.
Shares in PEC closed flat at 46 cents on Tuesday prior to the announcement.
