KS Drilling divests shares in Java Star Rig

By Ruli Setiawan

SGX-listed KS Energy Limited said that its associated company, PT KS Drilling Indonesia (PT KSDI), had on October 6, 2015, entered into a sale and purchase agreement with PT Citra Agramasinti Nusantara (PT CAN) pursuant to which it shall sell to PT CAN, 49,000 ordinary shares, representing 4.9 percent of the issued and paid-up capital of PT Java Star Rig (PT JSR) for an aggregate consideration of US$49,000.

As at the date hereof, PT JSR has an issued and paid-up share capital of US$1,000,000 comprising 1,000,000 ordinary shares, of which PT KSDI owns 999,000, representing 99.9 percent of PT JSR. PT KSDI is in turn 49.0 percent owned by KS Drilling Pte Ltd, which is in turn 80.0 percent owned by KS Energy.

KS Energy said in a statement Friday that the consideration of US$49,000 was arrived at on a willing-seller and willing-buyer basis, after taking into account the book value of the Sale Shares of US$0.87 million, as well as the rationale set out below.

The company said the proposed share transfer is being carried out for compliance with Presidential Regulation of the Republic of Indonesia Number: 36 of 2010 on List of Business Fields Closed to Investment and Business Fields Open, With Conditions, to Investment (Regulation 36). Under Regulation 36, PT JSR, as a company engaged in oil and gas drilling services, can only have a maximum of 95.0 percent foreign ownership. Accordingly, for compliance with Regulation 36, the company is undertaking the Proposed Transfer to PT CAN.

PT CAN is a company incorporated in the Republic of Indonesia principally engaged in the provision of supporting services to the oil and gas industry. As at the date hereof, PT CAN is 60.0 percent owned by Kris Taenar Wiluan, the Executive Chairman and Chief Executive Officer of KS Energy, and 40 percent owned by Hedy Wiluan, the sister of Mr. Wiluan.

The value of the Proposed Transfer, both alone and when aggregated with other transactions entered into with PT CAN for the financial year ending December 31, 2015, represents less than 3.0 percent of the audited consolidated net tangible assets of the Group. Accordingly, no shareholder approval is required for the Proposed Transfer.

The Proposed Transfer is not on an arm?s length basis or on normal commercial terms, but is beneficial to the company, especially in light of the rationale set out above, KS Energy said.

Editing by Reiner Simanjuntak