OceanScape International Limited Responds to SGX Queries on First Major Transaction in Renewable Energy Business

Key Points from the Company’s Response

• OceanScape International Limited (formerly V2Y Corporation Ltd.) has received queries from the Singapore Exchange Regulation (SGX RegCo) regarding its proposed acquisition of solar panel inventory, marking the first major transaction in its newly diversified Commodities Trading and Renewable Energy Business.
• Shareholders had previously approved diversification into the Commodities Trading Business, making the purchase of solar panels an ordinary course transaction for the company under its new business scope.
• Although the transaction is considered “ordinary course,” the company had committed to subjecting its first major transaction in the new business to shareholder approval.

Shareholder-Sensitive Issues & Potential Price-Moving Developments

• Transaction Classification: The acquisition of solar panel inventory showed a Rule 1006(c) relative figure of 111.15%, which typically classifies it as a Very Substantial Acquisition (VSA) under Catalist Rule 1015, requiring a full sponsor and compliance with listing standards akin to a new listing. However, OceanScape clarified that Rule 1015 is not fully applicable since the transaction does not involve acquiring a business undertaking, nor does it result in a change of control or new share issuance. Instead, the acquisition is treated as a “major transaction,” and shareholders will be asked to approve it at an extraordinary general meeting.
• Safeguarding Shareholder Interests: Despite not being a VSA, the company will provide a circular containing all information required under Catalist Rules 1010, 1011, 1012, and 1013, ensuring shareholders have sufficient information to make an informed voting decision.
• Order Book Status & Inventory Risks: The company is in the process of securing projects where these solar panels will be used, but the inventory purchase is not tied to any specific secured order. OceanScape argues that timely stocking of inventory is necessary for project execution due to shipping lead times. There is no significant risk of obsolescence, as the panels are of a generic model widely used in photovoltaic projects and expected to be utilized within the next financial year. The company has also indicated that anticipated project opportunities already exceed the quantity of inventory being acquired.
• Commercial Sensitivity: Specific details on the quantity and dimensions of the solar panels are withheld to prevent competitors from deducing inventory costs, which could be detrimental in competitive bids.
• Joint Ventures & Partnerships: Contrary to earlier indications in the shareholder circular, this inventory acquisition is not currently tied to any joint venture or partnership. The company will update shareholders should any such partnerships materialize in the future.

What Investors Should Watch For

• Upcoming Shareholder Vote: The transaction will require shareholder approval at an extraordinary general meeting, making it a key event that could impact the company’s direction and share price.
• Execution of New Business Strategy: The successful acquisition and deployment of solar panels for upcoming projects will be crucial to OceanScape’s growth in the renewable energy sector. Delays, project wins, or losses could affect investor sentiment.
• Project Pipeline Visibility: While the company claims to be securing projects, the lack of confirmed orders makes future revenue less predictable. Investors should monitor announcements for project wins or major partnerships, as these could be price-sensitive.
• Risk Management: The company’s approach to inventory management and its assurance on low obsolescence risk should be noted, but any unexpected changes in market demand or technology could impact inventory value.

Conclusion

OceanScape International Limited’s move into the renewable energy business with a significant inventory acquisition marks an important strategic shift. The transaction’s classification, requirement for shareholder approval, and commercial sensitivity of certain details make this a closely-watched development. Investors should pay attention to the upcoming EGM, future project announcements, and any new partnerships, as these could materially affect the company’s prospects and share price.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should perform their own due diligence and consult with a qualified financial advisor before making any investment decisions. The information provided is based on company disclosures and may be subject to change.

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