Datuk Seri Farouk Abdullah, who emerged as a substantial shareholder in Bio Osmo Bhd in April last year, is injecting his Impiana hotel business in Malaysia into the loss making company in a bid to turn it around.

The RM425.9mil reverse takeover deal will see Farouk’s stake in Bio Osmo rising above the 33% threshold that would require him to make a general offer to remaining shares in the company.

In a filing with Bursa Malaysia today, Bio Osmo said it had entered into several conditional share sale agreements with Farouk and other vendors to acquire assets including hotels under the Impiana brand in Kuala Lumpur, Ipoh and Kuantan, as well as land held future resort development in Pulau Pangkor.

Farouk, 72, is the executive chairman of Impiana Sdn Bhd and is the single largest shareholder in Bio Osmo with a 19.6% stake in the company.

After the completion of the acquisitions, Bio Osmo said it will change the company’s name to Impiana Hotels (Malaysia) Bhd.

The purchases will be satisfied via the issuance of RM400mil worth of new stocks and new irredeemable convertible preference shares (ICPS) in Bio Osmo.

Both the 4.8 billion new shares and 3.2 billion new ICPS will be issued at five sen each. The remaining RM25.9mil will be settled by cash.

Shares in Bio Osmo was last traded at five sen on Thursday.

“The diversification into the hospitality businesses which took place in 2016 has been contributing profits whilst the bottled drinking water division is incurring losses,” the company said.

Bio Osmo had on Oct 26, 2016 completed the placement of 224.4 million new shares that raised RM11.22mil. Proceeds from the exercise was used to acquire a 75% stake in Intra Magnum Sdn Bhd from Impiana Group.

“The proposed acquisitions will allow the company to further expand its existing hospitality business, improve the financial performance of the group and enhance shareholder value,” it said.

Meanwhile, the company has also proposed to place out 2 billion new shares at five sen each to third party investors to be identified at a later date.

The mnove will raise as much as RM100mil to help the company pare down its borrowings and fund future expansion of its hospitality assets.

To meet the minimum shareholding spread after the takeover, Farouk has offered to sell up to a billion shares in the company at five sen each to third party investors.

“The group expects that the expansion of its hospitality business after the proposed acquisitions will allow the group to benefit further from the profitability of Impiana group,” it said.

News Source: The Star, 12 April 2018


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