KS Energy's business consolidation proposal receives shareholders' support

The oil & gas and marine distribution and services hub will represent more than 300 globally accredited brands and will distribute more than 60,000 oil & gas related parts.

Main board listed integrated oil & gas services provider, KS Energy Services Limited (KS Energy) has received on Mar. 25 approvals and strong support from the shareholders of KS Energy, Aqua-Terra Supply Co Ltd (ATS) and SSH Corporation Ltd (SSH) to consolidate the oil & gas and marine distribution and services businesses of the three companies (the Business Consolidation).

Upon completion of the Business Consolidation, ATS and SSH will be privatised and become wholly owned subsidiaries of KS Distribution Pte Ltd (KS Distribution), which will in turn be a 55% subsidiary of KS Energy. The other 44.375% of KS Distribution will be owned by funds managed by Actis LLP (Actis), a private equity investor in emerging markets, and the remaining 0.625% will be held by the CEO-designate of KS Distribution.

Commenting on the strong support from shareholders, Mr. Kris Wiluan – Chairman and CEO of KS Energy said: "The Business Consolidation marks an important milestone for KS Energy. As a fully integrated group, we will be in a better position to develop and grow our distribution business. I thank all the shareholders for their trust and support. I am confident that this initiative will improve shareholders' value and bring added benefits to all our customers and investors."

As oil & gas and marine distribution and services hub in the region, KS Distribution will provide employment to more than 850 employees across nine countries and will be able to provide better services and meet the needs of its customers through a larger suite of products and more value-added services.

With full amalgamation of the distribution operations of the three companies, KS Distribution is expected to enjoy marketing and cost synergies. In addition, KS Distribution could tap into the global network of its partner, Actis, which has a presence spanning Africa, Asia and Latin America, to access additional oil & gas and marine industry opportunities.

Gary Addison, Partner at Actis in Southeast Asia, said, "We are pleased that the shareholders have supported this transaction and are excited to partner with KS Energy. We look forward to working closely with Mr. Kris Wiluan and the KS Energy group to realise the full potential of KS Distribution and to harness the scale and breadth of its combined businesses across Asia and other emerging markets."

Mr. Kris Wiluan, who will also be the Chairman of KS Distribution, added: "I am confident that with the strengths of the combined distribution businesses of KS Energy, ATS and SSH, KS Distribution will quickly become the leading oil & gas and marine distribution player in the region and a valuable partner to our customers. And in the mid term, we plan to expand our overseas operations in China, the Middle East and Indonesia."

The management teams of KS Energy, ATS and SSH will be working closely together to rationalise and streamline the complementary operations of the three companies. Having worked under the same KS Energy group umbrella over the past few years, the three companies will be able to move quickly to consolidate the businesses and continue to work well as a team.

Subject to court approval and other closing procedures, the Business Consolidation is expected to be completed in May 2010.