Construction management

G Neptune Seeks Shareholder Approval to Acquire Soutern Score, a Construction Management Services Company, Under Its Proposed Regularization Plan

– The proposed acquisition is part of G Neptune’s proposed regularization plan which also includes, among others, at least RM108.61 million of fundraising through a proposed private placement.
– The seller of Southern Score has provided an aggregate net profit guarantee of RM80.0 million over the three-year period from 2022 to 2024.

KUALA LUMPUR, August 22, 2022 – (ACN Newswire) – G Neptune Berhad is pleased to announce that its circular, which includes several proposals under its proposed regularization plan, has been released today. Once completed, the proposed regularization plan is expected to meet its Guidance Note 3 (GN3) status and return it to a stronger financial position and profitability that will benefit all stakeholders.

Executive Director and Chief Executive Officer of Southern Score Gan Yee Hin and Executive Director and Head of Group Investment Banking and Islamic Banking of Kenanga Investment Bank Berhad Datuk Roslan Hj Tik [L-R]

The proposed regularization plan includes, among other things, the proposed acquisition of the entire stake in Southern Score Sdn Bhd from Super Advantage Property Sdn Bhd for a purchase price of RM252.0 million to be paid by the issuance of 1.68 billion shares.

Southern Score is a construction management services company with recorded net profit of RM6.51 million, RM19.20 million and RM35.18 million during the financial years ended 31 December 2019, 2020 and 2021 respectively. Super Advantage, as a supplier to Southern Score, has provided an aggregate net profit guarantee of RM80.0 million over the three-year period from 2022 to 2024. Super Advantage is owned by Tan Sri Datuk Seri Gan Yu Chai, Managing Director of Southern Score, a veteran in the construction and property development industries with over 30 years of experience, as well as Gan Yee Hin, Executive Director and CEO of Southern Score.

In addition to the acquisition project, the draft regularization plan also includes the following elements:

– proposed consolidation of ten existing shares of G Neptune into one consolidated share;
– proposed settlement of a debt in the amount of RM3.1 million to Mr. Chai Tham Poh, Executive Director of G Neptune, through the issuance of 20.67 million shares;
– proposed private placement of 543.05 million shares at an issue price to be determined later but which will not be less than 20 sen per share to eligible investors to be identified later; and
– proposed exemption under the tender offer rules from the requirement to launch a mandatory tender offer for the remaining G Neptune shares not already held by Super Advantage as well as Tan Sri Datuk Seri Gan Yu Chai and Gan Yee Hin.

Through the proposed private placement, G Neptune aims to raise at least RM108.61 million to be used for, among other things, the purchase of construction materials and reimbursement to contractors for future construction projects, as well as TCS SS Precast Construction Sdn Bhd (TSPC), a CIDB Grade 7 contractor in which Southern Score holds a 35% stake.

In addition, to better reflect the corporate identity of the Company in the future, it is proposed that the name of the Company ‘G Neptune Berhad’ be changed to ‘Southern Score Builders Berhad’.

Commenting on the proposed acquisition, Gan Yee Hin said, “The proposed acquisition of Southern Score is an integral part of the regularization plan as it will allow G Neptune to enter the construction industry which is a thriving industry and growing. help regularize the company’s financial position as it currently does not have a core business to maintain its listed status. We expect Southern Score to benefit from growth in the construction sector which is expected to be positive in 2022 following the reopening of the Malaysian economy. “

“We also intend to venture into the manufacturing of Industrialized Building Systems (IBS) products through TSPC, as we see demand increasing as the construction industry moves towards the adoption of IBS for better construction quality and productivity, less reliance on foreign labor as well as lower costs. Government initiatives are also supporting this adoption.”

The proposed regularization plan and the proposed name change are subject to, among other things, the approval of GNB shareholders at the next general meeting to be held on September 13, 2022.

Kenanga Investment Bank Berhad is the lead adviser and sponsor of the proposed relief plan as well as placement agent for the proposed private placement while Malacca Securities Sdn Bhd is the independent adviser for the proposed exemption.

G Neptune Berhad: 0045 GNB
Southern Score:

Source: Soutern ScoreG Neptune Berhad

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