$244m asset injection and other agreements will give it 26.8% stake

IN return for a sizeable stake, SembCorp Industries is injecting industrial park and leisure investments worth $244 million on the Indonesian Riau Islands into Gallant Venture (GV), a Singapore-incorporated company that is seeking a SGX-Sesdaq listing and counts the Salim Group as a major shareholder.

The investments consist of industrial parks in Bintan and Batam and leisure assets in Bintan.

The consolidation is aimed at streamlining these investments within SembCorp, and increasing the liquidity of these assets, said SembCorp.

GV, meanwhile, lodged its listing prospectus with the Monetary Authority of Singapore yesterday.

Under the consolidation, several of SembCorp's subsidiaries will sell their respective shareholdings in various assets to GV for $243.9 million in return for 478 million GV shares, which will be held by SembCorp's wholly owned subsidiary SembCorp Parks Holding.

The assets have an aggregate book value of about $213 million, said SembCorp.

SembParks will also obtain shares in GV through two other agreements executed yesterday - an option agreement entered into with Parallax Venture Partners XXX Ltd (PVP) and a conditional sale and purchase agreement entered into between SembCorp subsidiary Singapore Technologies Industrial Corporation Ltd (STIC) and Richbroad Investments Limited.

Under the first agreement, SembParks will buy 233.1 million shares from PVP for $5.7 million.

SembParks will also obtain 20 million new shares in GV from Richbroad as payment for the sale of its $10 million stake in the capital of Singapore Bintan Resort Holdings (SBRH) to Richbroad.

In addition, SembCorp also said that SembParks has entered into a conditional sale and purchase agreement with Anthoni Salim of Indonesian conglomerate, Salim Group, to sell 84 million shares to the group for $42 million.

Once all the agreements have been completed, SembCorp will own, through SembParks, 26.8 per cent of GV's issued share capital - or a total of 647.1 million shares.

According to GV's listing prospectus, this makes SembCorp the second largest shareholder of GV.

PVP, which is 60 per cent held by the Salim Group, is currently the largest shareholder, with a 37.6 per cent stake.

Through PVP and other stakeholders in GV, the Salim Group's aggregate interest is 63.3 per cent, said the prospectus.

The interest of JTC Corp's Ascendas is 7.32 per cent.

GV's net tangible assets as at June 30, 2005 was about $1.2 billion.

SembCorp also said that after GV's proposed listing, a moratorium period of six months will apply to all the shares in GV held by SembParks, and for 50 per cent of these shares for another six months thereafter.

SembCorp's shares closed four cents up at $3.50 yesterday.