In response to a query by Bursa on Wednesday, Eversendai said the mutual termination was due to the inability of Vahana Offshore (M) Sdn Bhd to satisfy the schedule of conditions precedent set in the share sale agreement dated June 30, 2020, to obtain the new financing facility upon the terms and conditions satisfactory to Eversendai (the purchaser).

In a bourse filing on Wednesday, the company, which is involved in structural steel works and energy business, said, “Vahana Offshore has been continuously trying to satisfy the condition precedent with local and international financial institutions but has not been successful”.

Eversendai does not expect the termination of the deal to have any material financial impact on the group or its subsidiaries.

The announcement came after Eversendai announced on Dec 28, 2023 that the group and the vendor, Vahana Holdings Sdn Bhd, had mutually terminated the conditional share sale agreement with immediate effect, “due to non-fulfilment of certain conditions precedent as set out in conditional share sale agreement”.

Incorporated in May 2013, Vahana Offshore is engaged in the operation, chartering and management of liftboat, marine vessels, tugs and barges. Vahana Offshore’s principal market is the Arabian Gulf — United Arab Emirates, Saudi Arabia, Kuwait and Qatar — which accounted for 99.58% of its total revenue in FY2019.

The proposed acquisition of Vahana Offshore is a related-party transaction, given that Vahana Offshore belongs to Eversendai founder and chairman/ managing director Tan Sri AK Nathan Elumalay. The proposed deal was announced in 2020.

AK Nathan, through Vahana Holdings, holds a 69.75% stake in Eversendai as at March 31, 2023.

Under the deal, Eversendai was to pay RM235 million to acquire the entire issued and paid-up capital of Vahana Offshore, to be satisfied via the issuance of 770.49 million new redeemable convertible preference shares (RCPS) at 30.5 sen each.

At RM235 million, the purchase sum was 48 times Vahana Offshore’s net profit of RM4.9 million for the financial year ended Dec 31, 2019 (FY2019).

Eversendai’s share price closed one sen or 6.25% higher at 17 sen on Wednesday, which translates into a market capitalisation of RM133 million.