Rex International Dramatically Increases Stake in Lime Petroleum Holding: Strategic Share Swap With Interested Party

Key Points at a Glance

• Rex International to acquire an additional 9.6% stake in Lime Petroleum Holding AS (LPH), increasing its interest to 89.74%.
• The acquisition is executed through a share swap with Monarch Marine Holding Ltd (MMH), an “interested person” under SGX rules.
• Rex will transfer 40% of Xer Tech AB (Xer Sweden) to MMH in exchange for the LPH shares.
• The deal is classified as both an “interested person transaction” and a “disclosable transaction” under SGX Mainboard Rules.
• No cash changes hands; transaction is equity-for-equity.
• Transaction gives Rex increased control over its core energy assets and more flexibility for future financing, against tightening global fossil fuel finance trends.
• Audit Committee affirms transaction is on normal commercial terms and not prejudicial to minority shareholders.
• Deal not subject to shareholder approval, but is fully announced per SGX requirements.

Detailed Breakdown of the Transaction

Rex International Holding Limited (“Rex” or the “Company”) announced a major strategic move to increase its ownership in key subsidiary Lime Petroleum Holding AS (LPH), the holding company for Rex’s Norway, Germany, and West African oil and gas ventures.

How the Deal Works

• The transaction is structured as a share swap between Rex’s wholly-owned subsidiaries and Monarch Marine Holding Ltd (MMH).
• Rex acquires 9.6% of LPH from MMH, raising its holding to 89.74% from 80.14%.
• In return, MMH receives 40% of Xer Tech AB (Xer Sweden), which is wholly owned by Rex and holds the Group’s drone business assets.
• MMH’s stake in LPH drops from 14.11% to 4.51%. Other shareholders remain unchanged: Schroder & Co Banque S.A. (4.3%) and Peter M. Steimler (1.45%).

Valuation and Financial Details

• Xer Sweden was acquired in 3Q2025 by Rex for SEK500,000 (~US\$53,367) to hold the Group’s drone assets, notably Xer Technologies AG.
• The swap consideration is based on a fair value of US\$2,073,200, correlating to 40% of Xer Sweden (valued at US\$5.18 million for 100%).
• The entire transaction value represents about 3.51% of Rex’s net tangible assets (US\$58.997 million as at 31 Dec 2024).
• No cash proceeds are involved; this is a pure asset swap.

Regulatory and Shareholder Implications

• Interested Person Transaction: MMH is considered an “interested person” under SGX rules due to its ownership ties to Rex’s controlling shareholders, including Dr Karl Lidgren and Mr Hans Lidgren.
• Aggregate value of all interested person transactions with the Lidgrens and their associates in FY2025, including this deal, is US\$2.07 million—well below the thresholds requiring shareholder approval, but requiring disclosure.
• The transaction is also classified as a “disclosable transaction” under Chapter 10 of the Mainboard Rules, based on relative size metrics.
• No shareholder approval is required; full disclosure is provided.

Strategic Rationale and Price-Sensitive Implications

• Increased Control: Rex’s stake in LPH now stands at nearly 90%, giving the Group greater influence and control over its core energy assets in Norway, Germany, and West Africa.
• Focus on Core Business: By swapping out its drone asset holding company, Rex is concentrating its resources and management focus on its energy business, which is stated as its core growth area.
• Flexibility in Financing: Higher ownership in LPH is expected to provide more options for structuring and administering future financing, a crucial factor as banks increasingly retreat from fossil fuel lending.
• Audit Committee Blessing: The Audit Committee has reviewed the terms and confirms the deal is on normal commercial terms and not prejudicial to minority shareholders.
• Minor Financial Impact: The deal is not expected to materially affect net tangible assets per share or earnings per share for FY2024, but gives Rex a stronger footing to pursue expansion in its main energy markets.

Other Noteworthy Points

• Corporate Governance: Dr Mathias Lidgren, related to the controlling shareholders, recused himself from all Board decisions on this transaction.
• Deal Safeguards: If required Norwegian regulatory consents are not obtained, the share swap will be unwound, but management assesses this risk as low.
• Inspection Rights: Investors may inspect the transaction agreement and the purchase price allocation report at Rex’s registered office for three months from the announcement date (25 September 2025).

What Investors Should Watch

• This transaction positions Rex International for stronger operational control and growth in its main energy assets, which could impact the share price as markets digest the implications for future earnings and strategic direction.
• Shareholders should note the increased concentration in energy assets and the reduced exposure to the drone business, reflecting a clear strategic pivot by management.
• MMH’s retention of a minority stake in LPH signals ongoing confidence in the asset’s growth prospects.

Conclusion

This transaction is potentially price sensitive as it fundamentally changes Rex International’s control and flexibility over its core energy business, a move that could enable more aggressive expansion or restructuring in the face of a changing energy finance landscape. Investors should monitor further developments and disclosures on LPH’s performance and any future funding or strategic moves enabled by this new structure.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should consult their own financial, legal, and tax advisers prior to any investment decision. The author and publisher are not responsible for any losses or damages arising from reliance on this information.

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