Kuala Lumpur, 27 January 2016 – Dagang NeXchange Berhad (“DNeX”) today received shareholders’ approval on its RM170 million acquisition of the entire equity interest in OGPC Sdn Bhd and 52 per cent equity interest in OGPC O&G Sdn Bhd – collectively known as OGPC Group – which is a leading provider of equipment and services for oil and gas, petrochemical and power and general industries. OGPC O&G Sdn Bhd is a 48 per cent-owned associate company of OGPC Sdn Bhd.
The acquisition of OGPC Group will be satisfied via RM83,000,000 in cash payment deriving from a rights issue and internal funds, and the remaining RM87,000,000 to be satisfied via issuance of 362,500,500 DNeX shares at RM0.24 per share together with 181,250,000 free warrants.
DNeX also received shareholders’ approval for the rights issue, special issue and establishment of an Employee’s Share Option Scheme (“ESOS”) of up to five percent of the issued and paid up share capital of DNeX.
The acquisition of OGPC Group is a critical building block for DNeX to scale up its business by diversifying into the energy sector. With completion of the acquisition, OGPC Group will contribute to a new stream of revenue for DNeX through sale of oil and gas related equipment and provision of engineering and technical support services.
Moreover, OGPC Group becoming part of DNeX will create a synergy with DNeX’s existing operations with its ICT business, amongst others, being able to leverage on OGPC Group’s network of clients in the energy sector by providing software and ICT solutions.
With a know-how heavy and asset light strategy, DNeX will work on integrating and developing a commercially sustainable energy business.
“Moving forward, DNeX will continue to focus on core areas of its energy business comprising oil and gas product and services, upstream exploration and production of oil and gas and power, as well as effective cost management and operational efficiency in all areas of business,” said Encik Zainal Abidin Jalil, Group Managing Director of DNeX.
He said whilst its diversification into energy sector is ongoing, DNeX is at the same time growing its ICT business through continuous efforts in providing end-to-end, comprehensive e-commerce services for Trade Facilitation particularly expanding on its Business-to-Government (“B2G”) services to Business-to-Business (“B2B”) services. These measures will transform DNeX to become a company supported by two pillars namely ICT and energy to drive its future revenue and profitability.