May 3, 2011

KKR seeks US$500 million Oceanus deal

Private equity firm Kohlberg Kravis Roberts (KKR) is seeking to buy Oceanus Group in a contract that could be worth around US$500 million (S$612.5 million), according to sources with direct knowledge of the deal.

Oceanus' shares were up 14.6% yesterday at S$0.275 (US$0.22) each when trading was halted mid-session. Some 29.3 million shares changed hands, the highest volume since January 17.

Singapore-listed abalone farmer Oceanus currently has a market value of about US$484 million. KKR has lined up financing of US$300 million to US$400 million from a group of banks, according to one of the sources. The sources declined to be identified as the talks were confidential. KKR and Oceanus declined to comment. Two sources said the take-private deal could ultimately see Oceanus relist in Hong Kong to unlock value in the stock.

Oceanus, a holding company originally listed in Singapore in 2008, has two main business segments of aquaculture production and abalone processing and distribution. Its abalones are farmed along the coasts of Fujian and Guangdong provinces in China.

Oceanus reported last month its fourth quarter net profit swung to a loss of RMB45.6 million (S$8.6 million, US$7.02), compared with a net profit of RMB59.1 (US$9.10) million a year earlier.