Hiap Seng shares soar 75% after Indonesian oil giant Chandra Asri buys 11.9% stake

[SINGAPORE] Indonesian petrochemical producer Chandra Asri has purchased an 11.9 per cent stake in Hiap Seng Industries, giving it a substantial stake in the steel fabrication service provider.

Hiap Seng shares soared in early trade on Wednesday (Jul 23) as news of the purchase broke, more than doubling in price to an intra-day high of S$0.028. The last time Hiap Seng shares traded at such levels was in October 2019, ShareInvestor data showed.

The counter finished the day at a multi-year high of 2.1 cents, 0.9 cents above Tuesday’s closing price, on a hefty turnover of 204.1 million units.

Chandra Asri’s entry could signal a future partnership between both companies, said Hiap Seng in a statement before trading commenced on Wednesday.

Chandra Asri is a subsidiary of Barito Pacific, the Indonesian power and industrial giant founded by billionaire tycoon Prajogo Pangestu.

Max Tan, Hiap Seng’s chief executive officer, said the deal is “a potential opportunity to explore strategic collaborations that will enhance long-term value for all stakeholders”.

Mashhad Dohadwala, projects and technology director at Aster Chemicals and Energy – a joint venture between Chandra Asri and global commodities trader Glencore – said a strategic relationship with Hiap Seng would strengthen Aster’s foundation to position it for future growth as it explores partnership opportunities.

Aster is reportedly in exclusive talks to buy oil major ExxonMobil’s Singapore gas stations. Earlier this year, it completed the purchase of Shell’s Singapore refinery and refining assets on Bukom and Jurong islands.