Hot Stock Protasco dips 3.26% after O&G venture called off

by **Cals** Thu 07 Aug 2014, 00:46

Hot Stock Protasco dips 3.26% after O&G venture called off

Business & Markets 2014

Written by Charlotte Chong of theedgemalaysia.com

Wednesday, 06 August 2014 11:30

KUALA LUMPUR (Aug 6): Protasco Bhd shares slipped 3.26% in morning trades on Wednesday after the company called off its venture into the onshore marginal oilfield development in Indonesia yesterday.

At 10:42 am, Protasco dropped 6 sen to RM1.78 after falling to a low of RM1.75 earlier.

The company announced to Bursa Malaysia yesterday that its amended sale and purchase agreement (SPA) to acquire a 63% stake in Indonesia-based oil and gas company PT Anglo Slavic Indonesia from PT Anglo Slavic Utama had lapsed.

It said that the announcement had lapsed on July 28 as the conditions laid out in the agreement had not been fulfilled by PT ASU and the security provider within the conditional period of six months.

Protasco disclosed that it was in discussion with PT ASU for the purchase price to be returned through, among others, cash and disposal of the secured shares in accordance with the terms of the related SPA.

MIDF Research said in a report today that it was not too perturbed over the deal cancellation as there would be minimal near-term impact to the group’s earnings growth prospect.

"Although the proposed investment may potentially deliver lucrative returns over the long-term, it would only contribute minimally to the group’s FY14 and FY15 operating profits," it said.

The research house is maintaining its "buy" rating on Protasco with a revised target price of RM2.69 per share (from RM2.90) based on FY15 sum-of-parts valuation.