SEMBCORP Industries is consolidating its industrial and leisure assets on the Indonesian islands of Batam and Bintan, worth $244 million, into an entity that will seek a listing in Singapore.

The entity, called Gallant Venture, has agreed to buy the assets from SembCorp and other owners. They will then be pumped into the troubled firm Alliance Technology and Development, whose shares have been suspended since March 2002.

It is part of a complex rescue plan hatched by Gallant and Alliance last year.

Once the assets, with a combined worth of $1.2 billion, have been consolidated into Alliance, new shares will be issued to their previous owners, including SembCorp, as well as existing Alliance shareholders and creditors.

Gallant has already received the nod from the Singapore Exchange to list on Sesdaq and it has submitted its preliminary prospectus to the Monetary Authority of Singapore.

Under the deal, SembCorp will get an indirect stake of 26.84 per cent in Gallant. This will be held through its wholly-owned subsidiary SembCorp Park Holdings.

Gallant is a privately-held company significantly owned by Indonesian firm Herwido Rintis, which is one of the owners of the $1.2 billion worth of assets on Bintan and Batam to be pumped into Alliance. These include:

• Industrial parks, such as Batamindo Industrial Park and Bintan Industrial Estate;
• A utilities business;
• Leisure operations, such as Bintan Resorts; and
• A property development arm.

Other key owners of these assets include SembCorp and Parallax Venture Partners XXX.

As part of the transaction, they will be paid in new Gallant shares, which will be issued after the rescue plan receives the nod from Alliance shareholders and creditors.

Alliance, a former eye-care products supplier, collapsed under $115 million worth of debt in March 2002. Its shares were suspended and the company is now under judicial management.

The court-appointed manager, Mr Ong Yew Huat, from Ernst & Young, said that existing Alliance shareholders would get about $4 million worth of Gallant shares under this rescue plan.

"Otherwise, shareholders will get nothing if the company gets liquidated," he said.

SembCorp said the transaction will have no material impact on its earnings for the financial year ending Dec 31.