SINGAPORE - Advanced Holdings announced on Monday (Jan 23) that it has entered into a non-binding agreement to acquire the entire equity interest in Agricore Global Pte Ltd, together with its subsidiaries and associated companies.

The proposed acquisition, if undertaken and completed, is expected to result in a reverse takeover of Advanced Holdings. If successful, the company will seek a transfer of its listing from the mainboard to the Catalist.

The Agricore Global group is owned by Hoch Ventures Limited, Vertex DG Pte Ltd, Mr Hery Hermawan Herijanto and his family members.

Subject to completion of a group restructuring exercise, the group will have an interest in the concessions to 23 parcels of agricultural permits in Indonesia to be cultivated into crude palm oil plantations, as well as two forestry concessions for timber management. The assets are located on Indonesia's Sulawesi Island and have a land permit area of about 232,102 hectares.

On the rationale for the move, Advanced Holdings said it continues to face challenging business and operating conditions as, following the drop in oil prices in 2014, the industries that it serves have been experiencing a global slowdown.

It believes that the proposed acquisition will allow it to venture into a new business area that has potential for growth, and to diversify from existing industries that it serves, thus limiting its exposure to risks relating to the prolonged uncertainty of external economic factors.

The purchase consideration for the target shares will be from S$180 million to S$240 million, subject to negotiations. It will be paid partly in cash and partly by the issue and allotment of new ordinary shares in Advanced Holdings at an indicative issue price of S$0.50 per share, in a proportion to be mutually agreed upon.