AcroMeta has, on Jan 19, received an indicative non-binding letter of intent (LOI) from AESM to buy its controlled environments engineering subsidiary, Acromec Engineers.
AESM is a newly-incorporated private company that consists of a few of the management personnel from Acromec Engineers. This includes Chew Chee Keong, founder of Acromec Engineers and chief operating officer (COO) and executive director of AcroMeta.
The LOI requires AcroMeta’s in-principle acceptance within 10 business days, failing which, the LOI will lapse. Should AcroMeta accept, both parties aim to enter into a definitive agreement by Feb 28 or any other mutually-accepted date.
AcroMeta says it has evaluated the merits of the offer but has yet to accept the LOI.
That said, if the buy-out is concluded, AcroMeta’s remaining core business would be its its co-working laboratory space business via its 70%-owned subsidiary Life Sciences Incubator Holdings Pte Ltd (LSI). The buy-out is also set to include the novation – or substitute – of LSI’s net debt. The group will also be indemnified following the creditor’s voluntary liquidation of Neo Tiew Power, in which it has a 56% effective interest.
“While the controlled environments engineering EPC (engineering, procurement, construction) business still has growth potential, there will be ongoing margin pressures and challenging operating conditions, primarily due to increased costs in energy, manpower and construction materials,” says Levin Lee, AcroMeta’s executive chairman.
“In particular, the availability of skilled manpower poses a challenge together with higher wages and higher dormitory space rental costs. Thus, we want to focus on the less capital-intensive and higher value-add co-working laboratory business to strengthen the group’s performance,” he adds.
Shares in AcroMeta closed at 2.9 cents on Jan 25.
