DNEX TO BUY ADDITIONAL 60 PCT STAKE IN PING FOR US$78 MLN

KUALA LUMPUR, Jan 22  -- Dagang NeXchange Bhd (DNeX) has entered into a conditional share sale and purchase agreement (SSPA) with the other shareholders of Ping Petroleum Ltd to acquire an additional 60 per cent of the issued share capital in Ping not owned by DNeX, for US$78 million (RM314.3 million). 

Based on the SSPA, DNeX may nominate its wholly-owned subsidiary DNeX Energy Sdn Bhd to be the transferee and registered holder of those shares.

DNeX currently owns 30 per cent in Bermuda-incorporated oil and gas (O&G) outfit Ping through DNeX Energy.

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DNeX group managing director Datuk Seri Syed Zainal Abidin Syed Mohamed Tahir said Ping had proven to be a strategic fit with DNeX’s energy division and has contributed positively to the group’s earnings over the past few years.

“Ping is a solid investment, having been consistently profitable, generating positive operating cash flow, and is debt-free with a strong balance sheet. 

“This transaction also supports DNeX’s strategy to further establish its presence in the upstream O&G business, which can be progressively scaled up over time,” he said in a statement today.

The proposed acquisition will be satisfied by a combination of US$40.95 million in cash, and the issuance of new ordinary shares in DNeX and new redeemable preference shares in DNeX Energy, for the remaining US$37.05 million. 

The exercise is expected to be completed by the end of the second quarter of 2021 subject to all required approvals under the SSPA being obtained.

Upon completion of the exercise, DNeX will own 90 per cent of Ping, and this is expected to contribute positively to DNeX’s financial performance.

Syed Zainal Abidin said the key management team of Ping has deep O&G sector experience and would continue to remain at the helm of Ping.

“We are leveraging on their extensive expertise and business acumen in brownfield assets turnaround, with the objective of building an international portfolio of cash-generating assets,” he added.

Syed Zainal Abidin said Ping’s focus in the near-term would be to unlock its untapped potential and maximise economic value from its asset portfolio.

-- BERNAMA