Destini To Buy Remaining 49% Of Vanguard For S$3.5m

KUALA LUMPUR (Sept 25): Destini Bhd plans to acquire the remaining 49% stake it does not own in Vanguard Composite Engineering Pte Ltd, for S$3.5 million (RM10.71 million), cash, to improve the latter’s business performance to increase its profit contribution to the Destini Group.

As at Sept 23, 2015, Destini held an indirect 51% stake in the company — or 520,408 Vanguard shares — through its wholly-owned subsidiary Destini Armada Pte Ltd.

In its filing to Bursa Malaysia today, Destini said it had entered into a share sale agreement with vendor Ng Tuck Whye on Sept 23, 2015 for the proposed acquisition.

Incorporated in Singapore, the Vanguard Group is principally engaged in the provision of the manufacturing of lifeboats, hyperbaric lifeboats, fast rescue boats and life rafts.

Based on the audited report of Vanguard as at Dec 31, 2014, the net tangible assets (NTA) of the company is S$4.8 million.

As such, the purchase consideration of S$3.5 million for the 49% stake is equivalent to a 33% premium to the NTA of Vanguard.

Destini, which is involved in the distribution and supply of defence, commercial aviation and marine equipment and accessories, said the proposed acquisition will be funded by internally generated funds, and/or bank borrowings.

The group said since its acquisition of Vanguard in December 2012, Destini has made significant progress in increasing Vanguard’s sales volume and revenue.

“The challenge now is to cope with the increasing orders which require increasing the production capacity of the factory in Nantong, China,” said Destini.

The proposed acquisition, which is expected to be completed by the end of the year, is expected to contribute positively to the group’s earnings and net assets in the future.

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