Friday, April 1, 2011

SAM Engineering buys engine casing business for RM135m, delisting shelved

KUALA LUMPUR: SAM Engineering & Equipment (M) Bhd (formerly LKT INDUSTRIAL BHD []) is acquiring the assets and manufacturing business of engine casing, a division of Singapore Aerospace Manufacturing Pte Ltd for RM135 million in cash and loan stocks.

The proposed acquisition would interest investors after its major shareholder Singapore Precision Engineering Ltd (SPE) intends to retain the listing status of SAM Engineering and it would undertake a proposed rectification plan about its shareholding.

SAM Malaysia executive director and chief executive officer Jeffrey Goh said on Friday, April 1 the acquisition was part of its long-term strategy to grow the business and diversify the customer base beyond the current backend business.

He said the acquisition would our SAM Engineering at the forefront of the global aerospace industry while the casing business would be accretive to the revenue and earnings.

'More importantly, it (engine casing business) will help in balancing the volatility in our current business in the electronics and semiconductor industries over the long term. Moreover, the technologies that we will acquire through this transaction will also serve as platforms to expand our businesses to the manufacture of vacuum chambers for the semiconductor front-end, the LED and the solar industries,' he said.

Goh expected the transaction to be completed in the third quarter of 2011.

On Thursday, SAM Engineering said its major shareholder Singapore Precision Engineering Ltd (SPE) intends to retain the listing status of SAM Engineering and it would undertake a proposed rectification plan about its shareholding.

It said the company did not meet the requisite majority in number of shareholders voting in favour of the special resolution for the delisting at the EGM.

Under the plan, SPE would make a restricted offer for sale of 6.929 million SAM Malaysia shares, which had been acquired by SPE, to entities or persons who had previously accepted the offer'' at an offer price of RM2.10 per SAM Malaysia share.

If, following the proposed restricted offer for sale, SPE and its parties acting in concert still hold 90% or more of the issued and paid-up share capital of SAM Malaysia, SPE will place out such number of SAM Malaysia shares to investors to be identified, to ensure it holds less than 90% of the total equity interest in SAM Malaysia.

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