GSS Energy to acquire 100% shares in Cepu Sakti Energy

By Romel S. Gurky

SGX-listed manufacturing company GSS Energy announced Monday it had on August 14 entered into a settlement agreement with Java Petral Energy Pte Ltd (JPEL), under which the former will increase its stake in Cepu Sakti Energy Pte (CSE) Ltd to 100 percent from 53.7 percent.

CSE owns 95 percent of PT Cepu Sakti Energy, which holds the exclusive rights to cooperate in conducting operations for extracting oil from oilfields in Indonesia?s Central and East Java provinces.

The Settlement Agreement was entered into due to the termination of the agreement between PT CSE and Koperasi Unit Desa Sumber Pangan (KUD SP) dated July 24, 2015. The terms of the Settlement Agreement are as follows:
(a) the 76.0 million Consideration Shares previously issued to JPEL as part of the purchase consideration shall be returned to GSS Energy and cancelled via way of capital reduction;
(b) GSS Energy shall no longer be required to fulfil the Second Tranche of the Cash Consideration, being the sum S$10.2 million, which shall be waived in full;
(c) GSS Energy shall acquire JPEL?s remaining 46.32 percent in the issued and paid-up capital of CSE for a cash consideration of S$1.00, thus increasing its total stake in CSE to 100 percent; and
(d) the loans extended by the Company and by JEPL and its associates to CSE and its subsidiaries shall be fully waived.

?Pursuant to the Settlement Agreement, GSS Energy will acquire 100 percent of the total issued and paid-up capital of CSE for a total cash consideration of S$15.0 million and S$1.00, instead of the previously agreed consideration of S$48.0 million for 53.7 percent of the issued and paid-up capital of CSE under the SPA. This acquisition represents a complete purchase of JPEL?s stake, rights and claims to the economic benefits and assets of CSE,? GSS Energy said in a statement.

Commenting on the settlement and acquisition, Sydney Yeung, CEO of GSS Energy, said: "GSS Energy is pleased to announce the settlement with JPEL to take-over the remaining shares of our subsidiary, CSE. The settlement was done in a short time. The Board of GSS Energy appreciates the full cooperation of JPEL in working out this settlement with us. With the take-over of CSE, GSS Energy will now be able to deal with the issues that are impacting on some of our oil extraction business in Indonesia.?

Editing by Reiner Simanjuntak