China’s Sinochem Group is set to acquire Halcyon Agri Corp, and inject several assets into the SGX-listed rubber producer, according to sources. Among the assets to be injected into Halcyon is a controlling stake in GMG Global, another SGX-listed rubber producer, the sources say.
Halcyon said in Sept last year that it was “in confidential discussions with certain parties regarding a potential strategic transaction”. The statement was made in response to an SGX query about the unusual trading activity of its shares.
Halcyon provides a route to market for natural rubber planters around the region. It has 14 processing plants located in Indonesia and Malaysia, supported by a global network of logistics assets and sales offices. The company also has some 10,000 ha of land in Malaysia’s state of Kelantan, of which 7,200 ha is being established as a rubber plantation. The first tapping of its trees is expected in 2018.
For the nine months to Sept 30, 2015, Halcyon reported a 307% surge in revenue to $781.3 million and a net profit of $6.3 million, reversing a $15.66 million loss during the same period a year ago.
Halcyon has a gearing ratio of about three times, and net asset value of 39.5 cents per share. The stock is currently trading at 62 cents.
In 2008, a unit of Shanghai-listed Sinochem International Corp bought a 51% stake in GMG for 26cents per share, or $267.28 million. GMG manages more than 100,000 hectares of rubber plantations across Africa and Asia. It operates 12 processing plants located in Thailand, Indonesia,Cameroon and Cote d'Ivoire with total annual capacity of approximately 420,000 tonnes.
For the nine months to Sept 30, 15, GMG reported a 21.5% decline in revenue to $489.2 million, and a net loss of $7.9 million. The company has a gearing ratio of 0.29 times, and net asset value of 96.65 cents per share. Its shares are trading at 30 cents.
By Goola Warden / theedgemarkets.com
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