Perisai Petroleum Teknologi Bhd has proposed to acquire the entire equity interest in Garuda Energy (L) Ltd for
US$70 million (RM210 million).

The purchase consideration will be satisfied by way of US$50 million (RM150 million) cash and the issuance of new ordinary shares of Perisai at an issue price of 65 sen per share for the remaining US$20 million (RM60 million).

In a filing to Bursa Malaysia today, Perisai said it entered into a term sheet which contains the material terms of the proposed acquisition with the vendor, Nagendran Nadarajah, today.

Garuda Energy currently owns a jack-up rig, namely Rubicone. Rubicone is currently being converted into a Mobile Offshore Production Unit (MOPU) at Jurong Shipyard in Singapore and is expected to be completed by May 2011.

Perisai said Garuda Energy would enter into a bareboat charter agreement with Gryphon Energy (M) Sdn Bhd (GEM) -- which was recently awarded a contract by a major oil and gas company to lease, operate and maintain a MOPU for a period of 2+1+1 years -- for the supply of the MOPU.

'A bare boat charter arrangement of the MOPU with GEM is expected to be generating revenue of approximately US$25 million per annum,' it said. -- Bernama