Giken signs private placement deal to help fund Cepu Sakti acquisition

By Romel S. Gurky

SGX-listed manufacturing firm Giken Sakata Limited signed Friday a placement agreement with Religare Capital Markets (Singapore) Pte Ltd to raise funds to help finance the planned acquisition of shares in Cepu Sakti Energy Pte Ltd.

The company said in a statement that the placement agreement, subject to shareholders approval, is expected to raise a net proceeds of about S$22.7 million.

Giken said that under the agreement, the company will issue 80 million new shares, representing about 16.9 percent of the enlarged capital of the company.

Giken announced in April that it has signed an MoU with Java Petral Energy Pte Ltd (JPE) for the proposed acquisition of 51 percent shares of Cepu Sakti Energy Pte Ltd (CSE) for about S$48 million.

JPE owns 95 percent shares of CSE, which holds the rights to operate and produce oil from two oilfields in the Central Java region with a total of 148 oil wells. As at the date of the MoU, the Oil Fields are producing a minimum of 300 barrels of crude oil per day.

?The company intends to acquire 624,079 shares in the capital of Cepu Sakti Energy Pte. Ltd. The company is undertaking the placement primarily to fund the first tranche of the cash consideration and the shareholder?s loan (to be extended by the purchaser to the target). The net cash proceeds from the placement (after deducting expenses relating to the placement) will be approximately S$22,700,000,? Giken said in the Friday statement.

Editing by Reiner Simanjuntak