Propel Global to Acquire 51% Stake in O&G Engineering Firm for RM7.82 Million

Propel Global Berhad (Bursa: MAIN, PGB, 0091), provider of oil and gas supporting services such as well services , engineering, procurement, construction and commissioning (EPCC) services, maintenance of heating, ventilation and air-conditioning (HVAC) systems as well as downstream specialty chemicals to the oil and gas (O&G) industry, today announced that the Company has entered into a conditional share sale agreement to buy a 51% stake in Best Wide Engineering (M) Sdn. Bhd. (BWE) for RM7.82 million.


Ms. Angeline Lee, Group Chief Executive Officer of Propel Global


BWE provides engineering and technical works for the O&G industry through engineering, procurement, construction and commissioning (EPCC) of new plants and plant modification works; design and supply of skidded process systems and engineered equipment for onshore plants and offshore platforms and; project management and engineering consultancy services. Its shareholders and directors are Azizi bin Alias (Azizi) with 45.8% equity interest, Jasniazrin Shah Bin Mohd Hata (Jasniazrin) with 44.2% equity interest and Tan Siew Lee (Siew Lee) with 10.0% equity interest.

Propel Global is acquiring the 51% stake from Azizi, who is selling his entire equity interest, and Siew Lee, who is selling 5.2% of his holdings. As part of the share sale agreement, Propel Global has also entered into a put and call option agreement with Jasniazrin and Siew Lee that requires the Company to purchase up to 49.0% of the remaining equity interest in BWE from them and, Jasniazrin and Siew Lee will grant Propel Global the right during the call option period that requires them to sell up to 34.0% equity interest in BWE to the Company.

BWE, which has 15 ongoing contracts with total unbilled contract value of RM21.8 million expected to be realised over the next three years, is guaranteeing a profit of RM2.4 million and RM2.6 million in profit after tax (PAT) for the financial year ended 30 November (FYE) 2022 and FYE 2023 respectively. BWE reported revenue of RM18.6 million and PAT of RM178,000 for FYE2019; RM19.0 million revenue and RM395,000 PAT for FYE2020 and; RM38.5 million revenue and RM2.3 million PAT for FYE2021. Currently, BWE has a tender book of RM41.3 million.

Ms. Angeline Lee, Group Chief Executive Officer of Propel Global said, “The acquisition is in line with the Group’s strategy to grow the O&G business through expanding our offerings and enhancing market presence as an O&G engineering services provider. BWE’s expertise and experience in EPCC works complements the Group’s existing O&G business.”

“We believe that combining the core competencies of BWE with the Group would enable the latter to bundle a wider range of service offerings to its customers and provide it with a competitive edge over competitors. The Group will also be able to tap into BWE’s existing customer base for cross-marketing opportunities and additional revenue stream.”

Propel Global Berhad: 0091 [BURSA: PGB], https://www.propelglobal.com.my/






Topic: Press release summary



Propel Global Berhad Confident of Expansion Plans on New Structure and Fresh Cash Injection

Propel Global Berhad is confident that the new corporate structure as well as the cash reserve resulting from a regularisation plan that will see it take over the listing status of Daya Materials Berhad on 28 April 2022 will support expansion plans for both the oil and gas (O&G) and building technical services businesses that the Group is acquiring from Daya Materials.

Ms. Angeline Lee, Group Chief Executive Officer of Propel Global

The Group will trade under the stock name PGB and stock code 0091 from 28 April 2022 on the Main Market of Bursa Securities Malaysia Berhad. The listing of Propel Global follows the approval by shareholders at an extraordinary general meeting (EGM) on 21 January 2022 of a regularisation plan for Daya Materials that had been proposed on 31 December 2020.

Ms. Angeline Lee, Group Chief Executive Officer of Propel Global said, “We would like to thank stakeholders for keeping the faith with us on the corporate exercises that will conclude with the listing of Propel Global. We have seen the private placement representing 41% of our outstanding shares fully taken up by prominent investors and industry veterans. As a result of the funding from the private placement, Propel Global has a healthy cash balance and minimal debt as the gearing ratio has been reduced to 0.6 times.”

“The Group is actively exploring opportunities in the O&G industry especially in Sabah and Sarawak. High crude oil prices will encourage more investments into the industry, especially from oil majors. The country’s borders reopening will spur business activities and therefore demand for oil and gas.”

According to the US Energy Information Administration’s recent Short-Term Energy Outlook, international crude oil benchmark Brent is expected to trade at an average US$108 a barrel in the second quarter of this year and US$102 a barrel on average in the second half of 2022.

“We will continue to concentrate on expanding our existing well intervention and pipe recovery business by training our field engineers to deliver a wider range of downhole well technology solutions for our clients. Over the mid-term, we are looking to venture into the wireline business as this will make us more competitive in the plug and abandonment as well as the decommissioning programmes for both downstream and upstream facilities.”

“We also see more opportunities opening up for the building technical services business as foreign multinational companies (MNCs) investing in Malaysia set up their plants and facilities. We intend to leverage on the synergy from our construction and project management technical services as well as heating, ventilation and air conditioning operation and maintenance services to grow the building technical services business.”

Propel Global also has mid-to-long-term plans to venture into sustainable development and digital technology as part of the Group’s transition to a zero-carbon business focus that includes renewable energy and electrification.

About Propel Global Berhad

Propel Global Berhad is the listing vehicle that will take over the listing of Daya Materials Berhad on 28 April 2022. As part of the Group’s listing, Propel Global will acquire Daya Materials’ oil and gas (“O&G”) and building technical services assets. These O&G assets include services in pipe recovery for drilling operations, downhole data logging and processing as well as chemical blending and supply for both downstream and upstream operations. The building technical services business provides design, engineering, construction, project management and maintenance & management of commercial and industrial buildings and facilities on a single-source platform to a wide range of industrial clients.

For more information, please contact:
Hakim Syed Munif
Tel: +60 12-318 5410
Email: h.juraimi@swanconsultancy.biz






Topic: Press release summary