KUALA LUMPUR (Dec 9): Facility management firm GFM Services Bhd (KL:GFM) said on Monday it has signed an agreement to explore a stake in oil-and-gas services firm Shapadu Energy Sdn Bhd for an indicative RM30 million cash.
Under the proposed acquisition, GFM will subscribe to shares equivalent to 15% in Shapadu Energy for RM10.0 million, and purchase 30% directly from Shapadu Corporation for RM20.0 million, GFM said in a statement. GFM and Shapadu will also sign a put and call option agreement, it said.
“The proposed acquisition represents a strategic move to strengthen the enlarged GFM’s foothold” in the oil and gas facilities maintenance sector, said GFM managing director Ruslan Nordin.
The Edge has reported GFM’s potential acquisition of Shapadu Energy, which provides downstream maintenance and turnaround services as well as upstream maintenance, hook-up and commissioning activities, in the Dec 9-15 issue of The Edge Malaysia weekly.
Shapadu Energy, through its 60%-owned subsidiary, Shapadu CR Asia, holds the integrated turnaround main mechanical and maintenance mechanical static contract at the Pengerang Refinery and Petrochemical Complex.
GFM is also on the same contract managing six facilities within the Pengerang Integrated Complex in Johor. With the inclusion of Shapadu Energy, GFM will have two such contracts in hand.
Shares of GFM rose on Monday to their three-month high after the announcement.
GFM rose as much as 9.8% to 28 sen, their highest since Sept 6, 2024. The stock was trading at 27.5 sen at 2.35pm, giving the company a market capitalisation of RM209 million after more than five million shares changed hands.
Under the terms of the non-binding heads of agreement, GFM will have the right to sell its shares in Shapadu Energy back to Shapadu Corporation under the put option, while Shapadu Corporation has the right to purchase GFM shares in Shapadu Energy with the call option.
If exercised, the transaction will involve a combination of the issuance of shares and redeemable convertible preference shares in Shapadu CR Asia. That could raise GFM’s stake in Shapadu Energy’s subsidiary to 49% through share issuance, and up to 60% upon conversion of the preference shares.
The put and call options are valid for two years from the execution of definitive agreements, GFM noted. The company added that it will work with Shapadu Corporation and Shapadu Energy towards signing definitive agreements within six months of the non-binding heads of agreement.