SML Corporation Presentation
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SML Corporation Limited is changing its name to Synertec Corporation Limited and is acquiring Synertec Pty Ltd, an Australian engineering consulting company. As part of this process, SML is conducting an offer through an initial public offering to raise $750,000, with the funds going towards expenses of the offer and acquisition. The acquisition of Synertec will diversify SML's business into the growing engineering consulting industry in Australia. Synertec has significant experience in liquefied natural gas projects and custody transfer systems.
SML Corporation Presentation
- 2. • NOT A PROSPECTUS OR ANY FORM OF OFFER OR ADVERTISEMENT: This Presentation is a not a prospectus or any other form of disclosure document or an invitation or an advertisement. This Presentation has been prepared by SML Corporation Limited (”SML Corporation“ or “Company”) in relation to an overview of an offer (“Offer”) of securities by SML Corporation as stated in a prospectus dated 23 June 2017 (“Prospectus”) which is available on SML Corporation’s website, www.smlcorporation.com Any recipient of this Presentation should carefully read and consider the Prospectus in full and seek advice from a financial adviser or other professional adviser before deciding to acquire the securities being offered under the Prospectus. Any recipient of this Presentation who wishes to acquire the securities to be offered under the Offer will need to complete the application form that accompanies the Prospectus. • The information in this Presentation is of a general nature and does not constitute financial product advice, investment advice or any recommendation. Nothing in this Presentation constitutes legal, financial, tax or other advice. Before making an investment decision, you should consider whether an investment in the Company is appropriate in light of your particular investment needs, objectives and financial circumstances and consider obtaining professional securities advice. In all cases, you should conduct your own investigations and analysis of the opportunity, the financial condition, assets and liabilities, financial position and performance, profits and losses, prospects and business affairs of the Company, and the contents of the Prospectus. This Presentation is current only at the date of this document. • NO OFFER TO SELL OR INVITATION TO BUY: This Presentation does not, and should not be considered to, constitute any offer to sell, or solicitation of an offer to buy, any securities in SML Corporation, and no part of this Presentation forms the basis of any contract or commitment whatsoever with any person. This Presentation, and any further information provided in connection with it, is neither a prospectus nor any other form of offer to invest in SML Corporation securities. This Presentation is being supplied to you, in whole or in part, for information purposes only and not for any other purpose. This Presentation is not, and should not be considered as, the giving of investment or financial product advice by SML Corporation or any of its shareholders, directors, officers, agents, employees or advisers. It does not purport to contain all the information that a prospective investor may require in connection with any potential investment in SML Corporation. Without limiting the foregoing, this Presentation does not constitute an offer to sell, or the solicitation of an offer to buy, any securities in the United States to, or for the account or benefit of, any U.S. Person (as defined in Regulation S under the U.S. Securities Act of 1933). This Presentation must not be distributed or released in the United States or to, or relied upon by, a U.S. Person or persons acting for the account or benefit of a U.S. Person. SML Corporation does not accept any liability to any person in relation to the distribution or possession of this Presentation from or in any jurisdiction. • FORWARD LOOKING STATEMENTS: This presentation may include forward-looking statements. Forward-looking statements are only predications and are subject to risk, uncertainties and assumptions that are outside the control of SML Corporation Limited. Actual values, results or events may be materially different to those expressed or implied in this presentation. Given these uncertainties, recipients are cautioned not to place reliance on forward-looking statements. Subject to any continuing obligations under the applicable law and ASX Listing Rules, SML Corporation Limited do not undertake any obligations to update or revise any information or any of the forward-looking statements in this presentation of any changes in events, conditions or circumstances on which any such forward-looking statement is based. DISCLAIMER 2
- 3. • SML Corporation Limited (ASX: SML), is an investment holding company incorporated on 15 October 2012 in Bermuda and was admitted to the Official List of the ASX on 28 May 2013. ! • On 10 March 2017, the Company announced to the ASX that it had entered into a conditional Share Sale Agreement to acquire all issued shares of Synertec Pty Ltd (“Synertec”). ! • Synertec is a multi-disciplined engineering consulting company, delivering specialist engineering and compliance services across complex and highly regulated oil and gas, biotechnology, food and dairy, industrial automation, petrochemical and fine chemicals, pharmaceuticals and water industries. ! • On 23 June 2017 SML Corporation Limited (to be renamed “Synertec Corporation Limited”) lodged a Prospectus at the Australian Securities Commission (“ASIC”). The Prospectus contains a Share Offer, Bonus Option Issue and Vendor Offer. The offer to the public is the Share Offer only. COMPANY OVERVIEW 3
- 4. Share Offer Price per Share Cash Proceeds from the Share Offer (before costs) Total Number of Shares to be issued under the Share Offer Total Number of Shares to be issued to the Synertec Shareholders under the Share Sale Agreement Total number of Shares on issue following completion of the Share Offer Maximum number of Bonus Options on issue at completion of the Options Offer Market capitalisation based on Share Offer price ! KEY OFFER STATISTICS $0.04 $750,000 18,750,000 ! ! 107,142,857 220,701,277 16,175,970 $8,828,051 4
- 5. SYNERTEC Synertec has designed and implemented LNG custody transfer systems for Australia’s largest liquefied natural gas production facilities (being the Gorgon and Wheatstone facilities). 5
- 6. ABOUT SYNERTEC Synertec, an Australian-based engineering and consulting, engineering procurement construction firm delivers specialist engineering and compliance services across complex and highly regulated industries. ! Synertec’s project management systems have embedded methodologies for concepts such as ISO 9001 (a set of international standards for management and verification of good quality management practices), risk and change management, quality gate and regulatory compliance, as well as standard project management philosophies for time, cost and quality management. ! Synertec has specific experience and expertise in: • project and construction management; • process, mechanical and electrical engineering; • safety system design; • process and industrial automation systems; • process optimisation and scale-up; • hazardous area design; • compliance to Australian and international safety and environmental regulations; and • project planning studies. 6
- 7. LNG CUSTODY TRANSFER • Synertec has established an innovative and best practice design and build capabilities in analyser systems for Liquefied Natural Gas (LNG) custody transfer operations (the “Synertec System”). ! • The Synertec’s System offers real time data availability and superior accuracy and speed of critical parameters which directly contribute to significant benefits for LNG facility operators. ! • Synertec has designed and implemented LNG custody transfer systems for Australia’s largest liquefied natural gas production facilities (being the Gorgon and Wheatstone facilities). ! • Whilst retaining an Australian focus, Synertec intends to implement a number of strategic priorities to increase penetration in international markets, thus broadening its availability to industry players. ! • Key factors that are critical to delivering the future growth of the Synertec Business include: • increasing market penetration; • innovation and product development; and • an enhanced international focus. ! • Since the formation of the business of Synertec in 1996, relationships have been established with major international companies as a result of projects within Australia. 7
- 9. MARKET AND INDUSTRY OVERVIEW Potential Market for LNG Custody Transfer System The accuracy and speed of the LNG Custody Transfer Technology makes it particularly applicable for the evolving LNG spot market. ! The potential market includes the more than 200 LNG liquefaction and regasification terminals, globally, that are either on-stream, under construction, planned, proposed or being considered. ! Australian Industry Overview For the financial year ended 30 June 2017, the revenue of the Australian engineering consultancy industry is expected to be approximately $43 billion. ! The Directors and Proposed Directors expect the industry outlook to improve over the next five years. ! Demand is expected to increase from the public sector as the government has increased infrastructure investment to a record $80 billion (approximately) in order to commence and implement significant infrastructure projects across Australia. 9
- 10. OFFER Shareholders Existing Issue of Consideration Shares to Synertec Shareholders Issue of Adviser Shares Shares Under the Offer Total Shares on Issue Indicative Market ! Application of Funds Expenses in relation to the Offer Costs in relation to the Acquisition Working Capital Total ! 80,879,849 107,142,857 13,928,571 18,750,000 220,701,277 $8,828,051 $356,192 $286,458 $107,350 $750,000 47.5% 38.2% 14.3% 100.0% Share Offer For the offer to the public of 18,750,000 Shares at an issue price of $0.04 per Share to raise $750,000 (Share Offer). ! Bonus Options Issue For a bonus issue of one (1) Option (Bonus Option) for every five (5) Shares held by the Existing Shareholders (Options Offer) for nil consideration to the Eligible Existing Shareholders. ! Vendor Offer For the offer to one of the Synertec Shareholders of 8,345,865 Shares as part of the consideration for the acquisition for all the fully paid ordinary shares held by it in the capital of Synertec. 10
- 12. PROPOSED BOARD Michael Carroll Director SML and Managing Director of Synertec ! Mr Carroll holds a Degree in Applied Science (Applied Chemistry) as well as post graduate qualifications in Chemical Engineering, and is a Founding Principal and Director SML and Managing Director of Synertec. As Managing Director of Synertec, Mr Carroll has successfully grown the business through negotiating complex agreements with a range of parties, such as large multinational energy conglomerates, water utilities, defence and pharmaceutical companies. Leeanne Bond Independent Non-Execumve Chairman ! Ms Bond is a professional company director with board roles in the energy, water and engineering services sectors. ! She has qualifications in engineering and management, and 30 years’ experience across a broad range of industrial sectors including energy, minerals, infrastructure and water resources. ! Ms Bond is a non-executive director of Liquefied Natural Gas Limited, Snowy Hydro Limited and deputy chair of Territory Generation (Power Generation Corporation owned by the Northern Territory Government). Kiat Poh Non-Execumve Director Mr. Poh holds Certified Diploma in Accounting and Finance from ACCA, UK, Diploma in Management Studies from the Singapore Institute of Management, and a Diploma in Civil Engineering from the Singapore Polytechnic. ! He has over 30 years’ experience at senior management level in the construction, real estate development, manufacturing industries and financial markets. Mr Poh has been a non-executive director of Centrex Metals Limited, a company listed on ASX since May 2008. Freddie Heng Non-Execumve Director Mr. Heng is a Chartered Accountant, BSc (Economics) from the London School of Economics. ! Mr. Heng is currently a director of Noel Gifts International Limited, a company listed on the Singapore Exchange and TMC Life Sciences Berhad, a company listed on the Kuala Lumpur Stock Exchange. 12
- 13. SUBSTANTIAL SHAREHOLDERS On completion of the Acquisition and the Share Offer and the Vendor Offer, the following Shareholders are expected to hold 5% or more of the total number of Shares on issue: New Concept Northwest Nonferrous Australia Mining Pty Ltd ! 98,796,992 39,375,000 SHARES % 44.8% 17.8% All the issued share capital in New Concept Corporation Limited is held and beneficially owned by TMF Trustees Singapore Limited as trustee of the Pinnacle (MCGA) Retirement Fund – this is a fund that is a trust, in respect of which the beneficial owners of all the benefits and rights in this fund are specified below (Beneficial Owners): Michael Carroll Samantha Carroll (spouse of Michael Carroll) Gassan Abdallah Kerry Abdallah (spouse of Gassan Abdallah) BENEFICIAL OWNERS BENEFITS AND RIGHTS 41.9% 8.1% 41.9% 8.1% 13
- 15. SYNERTEC HISTORICAL P&L Revenue Other income Profit on disposal of motor vehicles Materials and services expense Employee benefits expense Superannuation expense Depreciation and amortisation expense Occupancy expenses Car and travelling expenses Telecommunication costs Legal and professional fees Loss on disposal of motor vehicles Other expenses Results from operating activities Finance income Finance costs Net finance costs/(income) Profit before tax Income tax expense Profit from operations Other comprehensive income for the year, net of tax Total comprehensive income for the year For the 12 months ended 30 June 2014 $ 12,780,817 3,258,245 - (9,486,614) (2,639,757) (222,411) (60,514) (139,193) (159,353) (67,136) (213,169) (13,107) (183,298) 2,854,510 110,046 (165,580) (55,534) 2,798,976 (2,006,866) 792,110 - 792,110 For the 12 months ended 30 June 2015 $ For the 12 months ended 30 June 2016 $ For the 6 months ended 31 Dec 2016 $ 11,584,206 2,357,550 - (6,804,225) (3,241,758) (280,413) (65,420) (181,200) (157,552) (79,780) (212,273) - (200,290) 2,718,845 196,644 (143,589) 53,055 2,771,900 (1,677,282) 1,094,618 - 1,094,618 17,021,437 1,180,786 5,978 (9,367,898) (3,963,856) (337,276) (71,568) (172,655) (140,166) (117,307) (257,212) - (226,213) 3,554,050 37,251 (76,260) (39,009) 3,515,041 (2,680,818) 834,223 - 834,223 9,056,455 - 4,713 (4,216,045) (2,561,475) (203,021) (46,116) (80,952) (115,309) (70,731) (292,293) - (99,354) 1,375,872 16,178 (52,949) (36,771) 1,339,101 (408,121) 930,980 - 930,980 15
- 16. KEY INVESTMENT HIGHLIGHTS • Synertec is an established business with over two decades of history in Australia’s engineering consulting industry; ! • The Synertec Business is focused on the multi-disciplined and specialist engineering consulting industry; ! • Synertec’s senior management have many years of experience in the multi-disciplined and specialist engineering consulting industry to implement the new development strategies and growth plans for the business; and ! • If Synertec is successful at executing its growth strategy, Synertec may create and deliver significant Shareholder value with its multi-disciplined and specialist engineering and compliance services across complex and highly regulated oil and gas, biotechnology, food and dairy, hospitals, industrial automation, petrochemical and fine chemicals, pharmaceuticals and water industries. 16
- 17. INDICATIVE TIMETABLE Lodgement of Prospectus with ASIC 23 June 2017 Record Date for the Bonus Options 26 June 2017 Opening date of Share Offer and Vendor Offer 30 June 2017 Prospectus sent to the Existing Shareholders 5 July 2017 Closing Date for the Share Offer 28 July 2017 Subject to Directors’ satisfaction that the Conditions Precedent in Share Sale Agreement are satisfied (or waived), completion of Acquisition and issue of the Shares and Bonus Options and Redemption Notes 4 August 2017 Date of quotation of Bonus Options (suspended) 7 August 2017 Date of re-quotation of the Company’s Shares and Bonus Options 11 August 2017 17