KUALA LUMPUR (Nov 16): MAG Holdings Bhd has called of its proposal to take up a 50% stake in an Indonesian shrimp farm via a S$6.1 million (RM22 million) investment.
The group had entered into a term sheet with LIM Shrimp Organization Ltd (LSOL) for the proposed investment in Lim Shrimp Aquapolis Pte Ltd (LSA).
MAG has now decided to terminate the term sheet due to "deviation of the terms agreed" by LSOL, the group said in a stock exchange filing on Thursday.
The termination came after both parties had previously decided to extend the expiry date to enter into a subscription and shareholders agreement by three months to Dec 26.
The extension was sought in October as both parties required more time for feasibility study and due diligence exercises, as well as administrative processes involving the provincial government of West Nusa Tenggara.
If the joint venture had proceeded, LSOL would be providing a guarantee that at the end of a four-year period from the commencement of the shrimp processing and cold storage plant’s operations, LSA should deliver an average net profit of at least S$2.03 million (RM7 million) a year.
Shares of MAG Holdings closed half sen or 2.6% higher at 20 sen on Thursday, giving the group a market capitalisation of RM319.9 million.