Ezion sells two businesses to AusGroup

The Board of Directors of Ezion Holdings Limited has announced that the Company has entered into a sale and purchase agreement dated 22 July 2014 with AusGroup Limited, pursuant to which AusGroup shall purchase, and the Company shall sell, the Company’s entire shareholding in Ezion Offshore Logistics Hub Pte Ltd and Teras Australia Pty Ltd. for an aggregate consideration of S$55 million.

EOLH, a wholly-owned subsidiary of the Company, is an investment holding company incorporated in Singapore with an issued and paid-up share capital of S$100,000 comprising 100,000 ordinary shares.

Teras, a company incorporated in Australia and a 90%-owned subsidiary of the Company, provides ship chartering services and maritime training to indigenous workers in Australia with an issued and paid-up share capital of A$1,250,000 comprising 1,111,111 ordinary shares.

The aggregate consideration of S$55 million was arrived at on willing-buyer and wiling-seller basis, after negotiations which were conducted on arm’s length between the parties, and take into account, inter alia, the net tangible assets of the Targets and the fair market value of the Targets of approximately S$55 million set out in the independent valuation report dated 10 July 2014 commissioned by the Company and prepared by Stone Forest Corporate Advisory Pte. Ltd.

The Consideration of S$55 million shall be satisfied in the following manner on completion of the Proposed Acquisition:

– S$14 million in cash; and

– 92,155,541 new fully paid ordinary shares in the capital of the Company having a total value of S$41 million, issued at a price of S$0.4449 per Consideration Share.

In line with the prospect statement made in 1Q2014 results announcement on 7 May 2014, the Proposed Sale will allow the Company to continue its focus on investments in Service Rigs to meet the strong demand for such Service Rigs.

Furthermore, the business of the Targets and AusGroup are complementary, but not in competition due to different services provided to similar clients in the similar geographical area of operations.

The Company will own approximately 17.83% of the enlarged share capital of AusGroup upon completion of the Proposed Sale and will enjoy the synergy from the fusion of the two complimentary business.