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?
- Excellent opportunity to expand its Energy-Related Engineering Division.
- Acquisition will provide the Group with the ability to grow its recurring revenue base further
- 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