Blumont to acquire Natra Bintan resort hotel and nearby land lots for S$78.4M in all-share deal with Malaysia’s Landmarks

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Blumont Group has entered a deal to acquire the Natra Bintan, a Tribute Portfolio Resort located within the waterfront resort development Treasure Bay Bintan in Riau Islands Province, Indonesia, as well as nearby land lots for a total of S$78.4 million, the company said in a filing to SGX Friday.

Natra Bintan has 100 luxury glamping tents and leisure and food and bevarage facilities on an around 52,031 square meter site, the filing said.

The consideration will be paid by issuing 15.67 billion new shares in the company at S$0.005 each, Blumont said. The new shares will represent around 56.8 percent of the existing share capital and around 36.2 percent of the enlarged share capital, the filing said.

Blumont said the deal represented another step in its strategy of venturing into the hospitality sector.

“These industries will show strong recoveryin the post-pandemic economy and the acquisition will enable the company to capitalise on
post-pandemic demands and opportunities,” Blumont said in the statement.

Rights cum warrants issue

Blumont said it is also proposing and issue of renounceable non-underwritten rights cum warrants, including up to 10.81 billion rights shares with up to 32.43 billion free detachable and transferable warrants, assuming the acquisition is completed, raising up to S$32.4 million.

If the acquisition isn’t completed, up to 6.89 billion rights shares with up to 20.68 billion warrants would be issued, raising up to S$20.7 million, Blumont said.

The rights shares will be on the basis of one rights share for every four existing shares and three warrants for every rights share subscribed, the filing said. The rights shares will be priced at S$0.001 each and the warrant exercise price will be S$0.001 each, the filing said. The rights share and warrant price represent a discount of around 80 percent to the closing share price of S$0.005 on Thursday.

“The company is undertaking the rights cum warrants Issue to raise funds to strengthen the group’s financial position and expand the capital base of the group,” Blumont said. “In view of the current financial circumstances, the company believes that the rights cum warrants Issue will
strengthen the company’s balance sheet, and a stronger financial position will also allow the group to seize opportunities through the expansion of business.”

If the acquisition is completed, around 75 percent of the net proceeds of the rights cum warrants issue will be used to operate the hotel and develop the land lots, 15 percent will be used for loan repayments and the remainder for general corporate and working capital requirements, the filing said.

If the acquisition is not completed, around 60 percent of the net proceeds will be used to support expanding the company’s business activities, 25 percent for loan repayments and the remainder for general corporate and working capital requirements, the filing said.

Deal structure

Under the deal, Blumont will acquire all of Mendol Investments and Hinako Investments, and 60 percent of Prime Holdings, Enggano Investments, Mesawak Investments, the filing said.

The sellers of Mendol are Strategic Premium and Luminous Global, which together hold 40.8 percent of Mendol, and Genprop with 5.1 percent, Wong Ho Kit with 2.1 percent, Sim Swee Yoke with 1.7 percent, Golden Prosperity LLP with 1.3 percent and Bursa Malaysia-listed Landmarks’ subsidiary Tiara Gateway with 49.0 percent, Blumont has said.

Mark Wee Liang Yee, who is the controlling shareholder of Blumont with a 51.37 percent stake, is also the executive deputy chairman, CEO and substantial shareholder of Landmarks, with an around 23.23 percent interest, the filing said.

Seychelles-incorporated Mendol is the holding company of two Singapore companies, Mendol Alpha and Mendol Beta, which are in turn holding companies of one Indonesian company, Mendol Estate, which in turn owns all of Natra Bintan, the filing said.

In addition, Tiara Gateway owns all of Seychelles-incorporated Prime Holdings, Enggano Investments, Mesawak Investments and Hinako Investments; those four Seychelles companies are the holding companies of eight Singapore companies, which in turn are the holding companies of five Indonesian companies owning land lots measuring around 82,978 square meters in close proximity to the Natra Bintan and the land lot the hotel sits on, the filing said.

New shareholding post-deal

The consideration for Mendol is S$29.34 million, while the consideration for the four Seychelles companies will be S$49.02 million, comprising the total S$78.36 million, the filing said.

Once the deal is completed, Tiara Gateway will hold 29.32 percent of Blumont, Strategic Premium will hold 1.85 percent, Luminous Global will have 3.69 percent, Genprop will have 0.69 percent, Wong Ho Kit will hold 0.29 percent, Sim Swee Yoke will have 0.23 percent and Golden Propsperity will have 0.17 percent, the filing said.

Mendol Group reported a net loss after tax of around S$800,000 for the six months ended 30 June with adjusted net assets of around S$29.6 million at end-June, while the four Seychelles companies posted a net loss after tax for the six-month period of around S$800,000, with adjusted net assets of around S$73 million as of end-June, the filing said.

A valuation by KJPP Rengganis, Hamid & Rekan in strategic alliance with CBRE, jointly commissioned by Landmarks and Blumont, put the market value of the hotel and land sites at S$26.01 million and S$42.93 million, respectively, the filing said.

Shareholders’ approval for the deals will be sought at an extraordinary general meeting.