SINGAPORE (June 17): Union Gas Holdings and Union Energy Corporation (UEC) has signed a memorandum of understanding (MOU) on Wednesday to set out a framework for the potential acquisition of UEC’s assets in its LPG distribution, bottling, and storage businesses.
The assets include shares in Sembas (Asia) Trading (Sembas), Semgas Supply (Semgas), and Summit Gas Systems (Summit), collectively known as the potential target companies.
The assets under discussion also include the bottling plants and land at 43 Jalan Buroh and 2D Jalan Pesawat, as well as the entirety of the LPG distribution business and its support infrastructure.
Under the agreement, all trademarks, brand names and goodwill relating to the LPG distribution, bottling, and storage businesses will also be acquired by Union Gas following the acquisition.
The consideration for the potential acquisition is expected to be fulfilled through a combination of cash and shares in the Company. The amount will be determined after due diligence has been conducted on the assets.
UEC is an established supplier and distributor of fuel products mainly to commercial and industrial customers. It also supplies and stores bottled LPG cylinders. Union Gas currently obtains its supply of bottled LPG cylinders solely from UEC.
Should the potential acquisition take place, this will likely constitute an “interested person transaction” under the Catalist Rules.
In a Wednesday statement, Union Gas says that the potential acquisition is “strategic and complementary” to its existing business.
“By owning and operating a holistic integrated LPG supply chain and acquiring an enlarged base of customers, the Group believes that it will be able maintain its competitiveness and improve the breadth and scale of its service offerings to all its customers,” it says.
Shares in Union Gas closed flat at 26.5 cents on Wednesday.
