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    L02   SG1I14879601

METIS ENERGY LIMITED

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Asset Acquisitions and Disposals::PROPOSED DISPOSAL OF TWO VACANT LAND PARCELS IN EAST KALIMANTAN TO PT DERMAGA PERKASAPRATAMA

12/09/2021 | 07:12am EDT

MANHATTAN RESOURCES LIMITED

(Incorporated in the Republic of Singapore)

(Company Registration No. 199006289K)

PROPOSED DISPOSAL OF TWO VACANT LAND PARCELS IN EAST KALIMANTAN TO PT

DERMAGA PERKASAPRATAMA

1. INTRODUCTION

1.1 The Board of Directors (the "Board") of Manhattan Resources Limited (the "Company", together with its subsidiaries, the "Group") wishes to announce that PT Kariangau Power (the "Seller" or "PT KP"), an indirect subsidiary of the Company, has on 9December 2021 entered into a conditional land sale and purchase agreement ("SPA") with PT Dermaga Perkasapratama (the "Buyer") (the Seller together with the Buyer, collectively the "Parties"), pursuant to which the Seller has agreed to sell, and the Buyer has agreed to purchase, the following vacant land parcels (such land parcels, collectively the "Land"):

  1. land based on Building Use Right Certificate No. 476 covering an area of 145,156 m2, Measurement Letter No. 00016/Kariangau/2011, at Kariangau Village, Balikpapan; and
  2. land based on Building Use Right Certificate No. 477 covering an area of 126,118 m2, Measurement Letter No. 00017/Kariangau/2011, at Kariangau Village, Balikpapan,

(the "Proposed Disposal").

2. INFORMATION ON THE SELLER, THE BUYER AND THE LAND

  1. Information on the Seller
    The Seller is a limited liability company duly established under the laws of the Republic of Indonesia in 2007, and has an issued and paid-up share capital of IDR 461,943,000,000 comprising 461,943 ordinary shares. The principal business activities of the Seller relate to the operations of a coal-fired steam power plant in the Kariangau industry area, Balikpapan, East Kalimantan, Indonesia.
    As at the date of this announcement, the Seller is an indirect subsidiary of the Company and the Company indirectly holds 86.11% of the issued share capital of the Seller.
  2. Information on the Buyer
    The Buyer is a limited liability company incorporated in Indonesia and engaged in the business of food production. It is based out of Balikpapan, East Kalimantan, Indonesia. As at the date of this announcement, the Buyer is 87.40% owned by PT Bayan Resources Tbk ("Bayan Resources").

1

2.3 Information on the Land

PT KP holds the right to build (Hak Guna Bangunan - HGB) in respect of three (3) pieces of land in Kelurahan Kariangau, Kecamatan West Balikpapan, Balikpapan City, East Kalimantan, Indonesia, further details of which are set out below:

Land area

(Square

No.

Type of land title

metres)

Expiry Date

1.

Right to Build (Hak Guna Bangunan -

145,156

6 September 2040

HGB)

2.

Right to Build (Hak Guna Bangunan -

126,118

6 September 2040

HGB)

3.

Right to Build (Hak Guna Bangunan -

60,749

6 September 2040

HGB)

The Right to Build (Hak Guna Bangunan - HGB) allows the holder of such land title to build, construct and/or remove either the building or any object over the land.

The power plant units owned by the Seller are located on Land No. 3. The Seller does not have any current business operations on the Land.

As disclosed in the circular dated 14 June 2016 when the Company acquired 92.18% of the total equity interests in PT KP, PT KP had commissioned KJPP Jimmy Prasetyo & Rekan ("KJPR"), a licenced valuer in Indonesia to carry out an independent valuation of the market value of, amongst others, Land No. 1 and Land No. 2 (i.e, collectively the Land) as at the valuation date of 5 April 2016. The market value of the Land based on such valuation then was IDR 103.7 billion (approximately US$7.8 million) (the "Previous Land Valuation").

PT KP is situated in the Kawasan Industri Kariangau ("KIK") zone. Since the early 2000s, the KIK zone has been designated as an integrated industrial zone in Balikpapan, Indonesia for heavy industry, medium industry and warehouses, and may accommodate industries such as coal, oil and gas, commodities, aquaculture and other business sectors. The Land was previously reserved for the expansion of the power generation business expansion and has been vacant till now.

3. SALIENT TERMS OF THE SPA

3.1 Conditions Precedent

The Proposed Disposal is conditional on the following conditions (each a "Condition" and collectively, the "Conditions"):

  1. the obtainment of all relevant approvals to carry out the Proposed Disposal;
  2. the issuance of a fairness opinion by licensed independent surveyors and/or public appraisers (the "Independent Land Valuation Report") and;
  3. an advance payment by the Buyer to the Seller in the amount of IDR 135,637,000,000 (one hundred thirty-five billion and six hundred and thirty-seven million Rupiah) (which

2

is approximately S$12,866,5001 (the "Down Payment") within five (5) working days from the date of the SPA and the receipt of the Seller's invoice, whichever is later.

Save for the Condition set out in paragraph 3.1(c) above, the Conditions are required to be fulfilled within three (3) months from the date of the SPA (or such date as may be agreed by the Parties in writing). In the event that all the Conditions are not fulfilled and/or waived by the Parties (as the case may be) within six (6) months from the date of the SPA, the SPA shall automatically terminate, and the Seller shall be obliged to refund the Down Payment to the Buyer.

3.2 Sale Consideration

The consideration for the Proposed Disposal is IDR 271,274,000,000 (two hundred billion two hundred seventy-four million Rupiah) (which is approximately S$25,733,000) which is equivalent to IDR 1,000,000 (one million Rupiah) per square metre (the "Sale Consideration").

The balance of the Sale Consideration (after deducting the Down Payment) of IDR 135,637,000,000 (one hundred thirty-five billion six hundred thirty-seven million Rupiah) (which is approximately S$12,866,500) will be paid by the Buyer to the Seller on the date of the execution of the relevant land sale and purchase deed.

The Sale Consideration was arrived at on a willing-buyer,willing-seller basis, after taking into account prevailing market conditions, the Previous Land Valuation and the rationale for the Proposed Disposal as disclosed in paragraph 4.1.

4. RATIONALE FOR THE PROPOSED DISPOSAL AND USE OF PROCEEDS

  1. The Board is of the view that the Proposed Disposal is in the best interests of the Company and its shareholders as:
    1. the Proposed Disposal is an opportunity for the Group to realise its property investment given that it is currently vacant and not generating any income and in light of the current COVID-19 situation, rental income for the Land may be restricted or limited in the foreseeable future;
    2. the Proposed Disposal is in line with the Company's intention to diversify into the renewal energy business as disclosed in the Company's announcement dated 20 October 2021 (the "20 October Announcement"); and
    3. the Sale Consideration will also provide another source of capital expenditure, development cost, and working capital for the pipeline projects for the renewal energy business which were described in the 20 October Announcement (the "Pipeline Projects").
  2. Use of Proceeds
    It is intended that the proceeds from the Proposed Disposal will be deployed as capital expenditure, development cost, and working capital with respect to the Pipeline Projects.

1 For the purposes of this announcement, the forex exchange between S$ and IDR is based on a forex rate of S$1: IDR 10,542) as at 7 December 2021 as extracted from the website of the Monetary Authority of Singapore.

3

5. CHAPTER 10 OF THE LISTING MANUAL

5.1 Relative figures

The relative figures for the Proposed Disposal, computed on the bases set out in Rule 1006 of the listing manual (the "Listing Manual") of the Singapore Exchange Securities Trading Limited (the "SGX-ST") and based on the Group's latest announced consolidated financial statements, being the unaudited interim financial statements for the six months ended 30 June 2021 are set out below:

Rule

Bases

Relative

1006

Figures (%)(1)

(a)

Net asset value of the assets to be disposed of, compared

27.53%

with the Group's net asset value

(b)

Net profit attributable to the assets disposed of, compared

0%(2)

with the Group's net profits

(c)

Aggregate value of the consideration(3) received compared

14.36%(4)

with the Company's market capitalisation(4) of approximately

S$179,190,219 based on the total number of issued shares

in the Company, excluding treasury shares

(d)

Number of equity securities issued by the Company as

Not

consideration for the Proposed Disposal, compared with the

applicable(5)

number of equity securities previously in issue

(e)

The aggregate volume or amount of proved and probable

Not

reserves to be disposed of, compared with the aggregate of

applicable (6)

the Group's proved and probable reserves

Notes:

  1. Percentage figures are rounded to the nearest two (2) decimal place.
  2. The relative figure for the net profit attributable to the assets disposed of, compared with the Group's net profits is zero as the Land has been vacant since the Seller's acquisition of the Land, and as a result, no revenue has been generated from the Land.
  3. The Sale Consideration is approximately S$25,733,000 based on the forex exchange between S$ and IDR of S$1: IDR 10,542) as at 7 December 2021 as extracted from the website of the Monetary Authority of Singapore.
  4. "market capitalisation" is calculated by the number of ordinary shares in the capital of the Company (excluding treasury shares) multiplied by the volume weighted average market price of S$0.060 per share as at 8 December 2021, being the market day immediately preceding the date of the Proposed Disposal.
  5. Not applicable, as the Company is not issuing any equity securities as consideration.

4

  1. Not applicable, as the Company is not a mineral, oil and gas company.

As the relative figures computed based on Rule 1006(a) of the Listing Manual for the Proposed Disposal exceeds 20%, the Proposed Disposal would constitute a "major transaction" under Chapter 10 of the Listing Manual. Accordingly, the approval of shareholders of the Company (the "Shareholders") is required in respect of the Proposed Disposal.

6. FINANCIAL EFFECTS OF THE PROPOSED DISPOSAL

  1. Illustrative Nature of Financial Effects
    The financial effects of the Proposed Disposal on the net tangible assets ("NTA") per share and earnings per share ("EPS") of the Company have been prepared based on the Group's audited financial statements for the financial year ended 31 December 2020 ("FY2020"). The financial effects below are purely for illustrative purposes and are not intended to reflect the actual future financial performance or position of the Group after completion of the Proposed Disposal.
  2. NTA
    Assuming that the Proposed Disposal had been effected on 31 December 2020 (being the end of the most recently completed financial year of the Group), the effects on the NTA per share of the Company would be as follows:

Before the Proposed

After the Proposed

Disposal

Disposal

NTA (S$ million)

84.07

100.58

Number of ordinary shares ('million)

2,986.50

2,986.50

NTA per ordinary share (cents)

2.81

3.37

6.3 EPS

Assuming that the Proposed Disposal had been effected on 1 January 2020 (being the beginning of the most recently completed financial year of the Group), the effects of the Proposed Disposal on the EPS of the Company would be as follows:

Before the Proposed

After the Proposed

Disposal

Disposal

Profit attributable to shareholders

8.07

24.28

(S$ million)

Weighted average no. of ordinary

2,314.41

2,314.41

shares - Basic ('million)

5

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

Manhattan Resources Limited published this content on 09 December 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 09 December 2021 12:11:07 UTC.


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