Malaysia: Straits Energy Resources makes move for SMF to become wholly-owned direct subsidiary 

Malaysia-listed Straits Energy Resources Berhad (SER) on Thursday (30 November) has entered into a conditional shares sale and purchase agreement with its subsidiary Tumpuan Megah Development for the proposed acquisition of Straits Marine Fuels & Energy (SMF) shares, representing 33% of the equity interest in SMF, according to a filing with Bursa Malaysia. 

SMF is currently a 67%-owned direct subsidiary of SMF. Upon completion of the proposed acquisition, SMF will become a wholly-owned direct subsidiary of SER. 

“The proposed acquisition entails the acquisition of the remaining 33% equity interest in SMF thus enabling Straits to consolidate the entire 100% equity interest of SMF into Straits Group,” SER said in a filing. 

“The proposed acquisition will allow Straits to obtain full control in SMF Group to drive the future strategic direction and growth of SMF Group, and enable Straits to fully realise all the efforts and initiatives put in place by the company and its management in SMF Group, thereby creating greater value and improving the competitiveness of the Group.”

SER said the acquisition also represented  a lower-risk investment for the Group as compared to an investment in a new business or external company.

This was due to SMF being an ongoing entity generating its own cash flow and profits as well as an existing subsidiary of the Group that does not require additional costs for integration in the group from an operational or administrative perspective.

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Photo credit: Straits Energy Resources Berhad 
Published: 1 December, 2023