KUALA LUMPUR (June 19): Ocean Vantage Holdings Bhd (KL:OVH), an oil and gas support services provider, is proposing to acquire a construction company for RM10 million as it seeks a new earnings stream amid declining revenue from its engineering, procurement and construction business.

The proposed acquisition of Bina Gemilang Bersatu Sdn Bhd (BGB) is a related-party transaction, as Ocean Vantage managing director Kenny Ronald Ngalin owns 50% of BGB, according to a Bursa Malaysia filing on Friday. The remaining 50% stake is held by BGB director George Henry.

Ocean Vantage said it will issue up to 50 million new shares at 20 sen each to acquire the entire equity interest in BGB. The issue price represents a 0.9% premium to Ocean Vantage’s five-day volume-weighted average market price of 19.82 sen up to Thursday, and a 17% premium to its audited net assets per share of 17.09 sen as at end-December 2025.

The consideration will be paid in two tranches, with six million shares worth RM1.2 million to be issued following the completion of the acquisition.

The remaining 44 million shares, worth RM8.8 million, will be issued if BGB achieves a profit after tax of at least RM2 million for the financial year ending Dec 31, 2026.

Should BGB fall short of the profit guarantee, the second tranche will be reduced proportionately. No shares under the second tranche will be issued if BGB records no profit or incurs a loss, said Ocean Vantage.

The RM10 million purchase price values BGB at five times its guaranteed profit, below the price-earnings multiples of between 6.6 times and 18.3 times for selected listed construction companies cited by Ocean Vantage.

BGB recorded an unaudited net profit of RM563,000 on revenue of RM5.1 million for the financial year ended Dec 31, 2025 (FY2025), compared with a net profit of RM123,000 on revenue of RM3.93 million for the previous year.

The Sarawak-based company is a Grade G7 contractor, allowing it to tender for construction projects without limits on contract value.

It has two ongoing projects worth a combined RM71.35 million, comprising road upgrading works for the Serian-Gedong-Samarahan dual carriageway and construction works for the Lundu-Sematan regional water supply project.

Its outstanding order book stood at RM63.97 million as at June 8, while its tender book amounted to about RM48.68 million.

Ocean Vantage said the diversification would reduce its reliance on its existing oil and gas support services business, which includes engineering and project management, manpower supply, equipment supply and drilling rig charter services.

The company’s revenue fell to RM110.58 million in FY2025 from RM123.64 million in FY2024 and RM169.69 million in FY2023, mainly following the completion of the Bintulu Additional Gas Facility 2 project.

Revenue from its engineering, procurement and construction and project management segment declined to RM24.43 million in FY2025 from RM84.63 million in FY2023.

Ocean Vantage expects the construction business to eventually contribute more than 25% of the group’s net profit or account for more than 25% of its net assets.

Upon the issuance of all 50 million consideration shares, Ocean Vantage’s issued share capital would increase to 479.94 million shares from 429.94 million shares, before accounting for the exercise of outstanding warrants and share options.

Kenny and George would receive the consideration shares equally. Kenny’s direct stake in Ocean Vantage would rise to 5.84% under the minimum scenario, while George would emerge with a 5.21% stake.

Kenny will abstain from deliberating and voting on the proposals. Malacca Securities Sdn Bhd has been appointed as independent adviser to the non-interested directors and shareholders.