PT Enso Asia beaten Boustead to win Indonesia Energy Asset

Boustead_NewEnergy

Boustead was one of my favorite stocks. Recently, Boustead announced the plan to acquire an energy asset in Indonesia. That was a piece of excellent news to me as I can see that the management is looking for ways to further expand and strengthen its businesses, given the weak crude oil prices right now which has affected its core businesses. This is how a company with excellent management like Boustead look for means and ways out of the current problem.

However, on 24th December, Boustead announced that PT Enso Asia has beaten the consortium (Boustead, One North Energy Private Limited and Lamara Energy Private Limited) to win the acquisition of Pase Production Sharing Contract (Pase PSC) in Aceh, Sumatra, Indonesia. Pase PSC is owned by ASX-listed  Triangle Energy (Global) Ltd.

The proposal for acquisition was announced way back on 9th November by Boustead.

What was Boustead Rational for Acquisition?

  1. Excellent opportunity to expand its Energy-Related Engineering Division.
  2. Acquisition will provide the Group with the ability to grow its recurring revenue base further
  3. The Group wanted to take the opportunity to shift into upstream ownership, production and potential development of natural gas, which is seen as the primary alternative and a cleaner fuel for power plants compared to coal.

My Thoughts on the Acquisition

The battle is not lost although Boustead did not win the acquisition. To me, it means Boustead has offered its best bid and contractual terms for Pase PSC.

Such an excellent company like Boustead will never give up trying. I look forward to new ideas from Boustead which will expand its business.

“Positioning to inject new energy”

Wong Fong Fui
Chairman & Group Chief Executive Officer

Summary of December 2015 Transactions

Portfolio_201512_Dec

Earlier in the first week of December, I bought a little bit more of ST Engineering. This increases my allocation from 10 percent to 12 percent for ST Engineering.

December was a month of dividends collection. I collected dividends from Mapletree Commercial Trust, ParkwayLife REIT, Far East Hospitality Trust, Cambridge Industrial Trust, OUE Hospitality Trust and AustNet Services.

On top of dividends, I have received my partial script dividends for Cambridge Industrial Trust. The reason for partial subscription of script dividends is because I have existing odd lots and we all know that the current minimum lot size is 100. With the addition, the quantity I hold for Cambridge Industrial Trust is no longer an odd number.

The global market looks uncertain at this moment. The Fed rate hike announcement on the 17th of December did not have much impact on the global markets. The reason for the quiet market can also be due to the holiday season and everyone was away from their buy and sell activities.

Going forward, I shall be building my war chest while waiting for a clearer outlook. I will nibble at a few of the counters in my watch list if prices are right but will avoid big transactions.