Rex US divests 49% stake in Loyz Rex Drilling Services for $4.5m

Part of parent's shareholding restructuring.

Rex International Holding Limited (Rex International Holding) announced that its wholly-owned subsidiary, Rex US Ltd. (Rex US), has entered into an agreement on 8 January 2014 to divest its entire 49 per cent interest in Loyz Rex Drilling Services LLC (Loyz Rex Drilling Services) to Loyz USA Holdings LLC (Loyz USA), for a consideration of US$4.5 million.

Loyz is an indirect wholly owned subsidiary of Loyz Energy Ltd. (Loyz),

The consideration will settled by way of US$1 million in cash and US$3.5 million (equivalent to S$4.41 million based on the exchange rate of S$1.26 to US$1.00) in newly issued ordinary shares in the capital of Loyz.

The transaction is subject to the receipt of the listing and quotation notice from the Singapore Exchange Securities Trading Limited (SGX-ST) for the Consideration Shares and the trading of the Loyz shares on the Catalist of the SGX-ST not being suspended and delisted from the Catalist.

The transaction allows for both Rex International Holding and Loyz to remain in collaborative partnership, with each focused on its own core competence in technology and operations respectively.

The Consideration Shares will be allotted and issued at S$0.3597 per Share, being a 5 per cent premium to the five days volume weighted average price of the Shares of S$0.3426 as at 30 December 2013, to Rex US. Based on the foregoing, 12,260,217 Consideration Shares are expected to be issued by Loyz.

As at the date of this announcement, the Consideration Shares represent approximately 3.1 per cent of the existing issued and paid-up capital of Loyz and approximately 3.0 per cent of the enlarged issued and paid-up capital of Loyz following the allotment and issuance of the Consideration Shares.

Subject to the completion of the Transaction being consummated, Rex US and Loyz USA agree that all rights, dividends, entitlements and advantages associated with the Sale Shares shall be transferred to Loyz USA effective as of and including 1 October 2013.

Loyz Rex Drilling Services is a joint venture between Rex US and Loyz USA, providing drilling services in the US with two wholly-owned onshore drilling rigs.

Going forward, the Company will be invested in Loyz, which has oil-drilling expertise and interesting assets in Southeast Asia. Rex International Holding had on 20 November 2013, completed the exchange of Rex US’s 20 per cent direct interest in the US concessions into newly-issued shares in Fram, as part of its restructuring of its investment holdings in the US. Pursuant to the aforementioned exchange, Loyz will remain as partner to a Participation and Exploration Agreement with Fram on similar terms as before.