Swiber/ Kreuz

Swiber/ Kreuz: to lift halt this morning. SEA9, the investment vehicle of a pan-Asian private equity fund advised by Headland Capital Partners, has proposed to acquire all the shares of Kreuz by way of a scheme of arrangement of $0.80, representing a premium of 78% over Kreuz’s NAV per share, and 4.5% premium of Kreuz’s last closing price. Accordingly, Swiber will receive $256.2m as consideration for its entire 57.5% equity stake in Kreuz. The cash proceeds will used as working capital to fund the operations of its core businesses and to undertake future business expansions, acquisitions and new invmt opportunities. Swiber expects to record a net gain of ~US$90.6m (~$0.186 per Swiber share) from this proposed disposal. In conjunction, all three companies have entered into a netting agreement, whereby all trade and other receivables owing by Swiber to Kreuz as at 3Q13, and vice versa, shall be set-off and settled. The proposed disposal is subject to the approval of shareholders of Swiber at an EGM to be convened. ~73.7% of Kreuz shareholders have given irrevocable undertakings to SEA9 to vote in favor of the scheme, just a tad shy of the 75% majority needed for the scheme of arrangement to go through. OCBC places its Buy rating and TP $0.86 under review.