KUALA LUMPUR: Eversendai Corp Bhd has abandoned its proposal to bring in a liftboat business nearly four years ago.
Founder and group managing director Tan Sri A.K. Nathan had in 2020 proposed to inject Vahana Offshore (M) Sdn Bhd, a private entity that is involved in the liftboat business, into the company.
The proposed acquisition of Vahana Offshore is a related-party transaction, given that Vahana Offshore belongs to Nathan.
Nathan, through Vahana Holdings Sdn Bhd, holds a 69.75 per cent stake in Eversendai as at March 31, 2023.
Under the deal, Eversendai was to pay RM235 million to acquire the entire issued and paid-up capital of Vahana Offshore, to be satisfied via the issuance of 770.49 million new redeemable convertible preference shares (RCPS) at 30.5 sen each.
At RM235 million, the purchase sum was 48 times Vahana Offshore's net profit of RM4.9 million for the financial year ended Dec 31, 2019 (FY2019).
Incorporated in May 2013, Vahana Offshore is engaged in the operation, chartering, and management of liftboats, marine vessels, tugs, and barges.
The company's vessels are Vahana Aryan and Vahana Arjun, which cost US$102 million (RM422 million) and US$100 million, respectively. Both vessels have bagged five-year charter contracts via Vahana Marine Solutions, which started in June 2020 and June 2021, respectively.
Vahana Offshore is the first and only Malaysian company to own and operate a liftboat, which is used for maintenance, workover, well service activities, hook-up, commissioning, and decommissioning of offshore platforms. Its key markets are the United Arab Emirates, Saudi Arabia, Kuwait, and Qatar, which accounted for 99.58 per cent of its total revenue in the financial year 2019.
Eversendai and the vendor, Vahana Holdings, announced on Dec 28, 2023, that they had mutually terminated the conditional share sale agreement with immediate effect "due to non-fulfillment of certain conditions precedent as set out in the conditional share sale agreement."
In response to a query by Bursa on Wednesday (January 3), Eversendai said that the mutual termination was due to the inability of Vahana Offshore to satisfy the schedule of conditions precedent set in the share sale agreement dated June 30, 2020, to obtain the new financing facility upon the terms and conditions satisfactory to Eversendai (the purchaser).
"Vahana Offshore has been continuously trying to satisfy the condition precedent with local and international financial institutions but has not been successful," it said.
Eversendai, which is involved in structural steel works and the energy business, does not expect the termination of the deal to have any material financial impact on the group or its subsidiaries.