KUALA LUMPUR (April 17): Handal Resources Bhd shares rose 4% after it inked a share sale agreement that would pave the way for a reverse takeover (RTO) of the integrated offshore crane services provider by oil and gas (O&G) player Borneo Seaoffshore Engineering Sdn Bhd (BSOE) in a deal worth RM25.5 million.

At 9.20am, Handal rose 1.5 sen to 39 sen with 308,500 shares done.

Handal said it has signed a conditional share sale agreement with SeaOffshore Capital Sdn Bhd to acquire 408,000 shares or a 51% stake in BSOE, and that consideration would be satisfied via the issuance of 42.86 million new Handal shares and 26.06 million new irredeemable convertible preference shares (ICPS) in Handal at 37 sen each.

SeaOffshore Capital is already a major shareholder of Handal, holding a 14.85% stake. After the proposed acquisition, which is slated for completion in the third quarter of 2019, SeaOffshore Capital will hold a 31.55% – just short of the 33% threshold required to trigger a mandatory general offer.

But upon the completion of the exercise and assuming full conversion of the ICPS, SeaOffshore Capital's shareholdings will increase to 39.82%, which would then trigger an MGO.