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Highlights
- Rektron announces non-binding term sheet with India-based R.K. Batra Group.
- Proposed acquisition to expand Rektron’s LPG sector capabilities and market reach.
- Rektron targets strategic growth with plans to double LPG fleet and operations.
Rektron Group Inc. (CSE: REK.U), a global commodity trading group specializing in energy, metals, and energy transition commodities, is excited to announce the signing of a non-binding term sheet with R.K. Batra Group (Batra), an established leader in India’s Liquified Petroleum Gas (LPG) sector. The agreement, dated January 1, 2025, marks a significant milestone in Rektron's efforts to expand its operations and solidify its position in the growing LPG market.
Founded in 1981 by Mr. R.K. Batra, the Batra Group initially began as a transporter of LPG, propane, and propylene under the name "Shree Rama Roadways." Over the years, Batra has developed a dominant presence across India and Nepal, operating a fleet of over 950 LPG road tankers and owning two LPG bottling plants. Furthermore, Batra operates an LPG cylinder manufacturing plant that has been rigorously assessed and approved for supply to the U.S. market, further expanding its global reach.
The proposed acquisition aims to significantly strengthen Rektron’s presence in the LPG sector and enhance its energy infrastructure assets. "We are thrilled to enter into this non-binding term sheet with R.K. Batra, which will significantly strengthen our capabilities in the LPG sector," said Atanas Kolarov, CEO of Rektron. "This transaction is anticipated to scale Rektron's energy ambitions and bolster our energy infrastructure assets."
As part of the agreement, Rektron plans to expand its LPG operations by strategically increasing its LPG fleet size and doubling the capacity of both its bottling and manufacturing operations. Additionally, Rektron intends to develop LPG terminals along the western and eastern ports of India and directly import LPG into the country to meet the growing demand. These initiatives are in line with Rektron’s strategy to cement its presence in India and further capitalize on the energy needs of the region's rapidly expanding population.
The acquisition will involve the merger of Batra's subsidiaries: Suryashakti Vessels Private Limited, Gill International Limited, and Shree Rama Roadways into a single holding company. Under the terms of the proposed deal, Rektron will acquire a 68% interest in the combined entity, with Batra retaining the remaining 32% holding. The transaction will be structured as either a share swap or a combination of a share swap and a cash consideration. Notably, there will be no finder fees payable in relation to this acquisition, and both parties are acting at arm's length.
The proposed acquisition is still subject to the completion of satisfactory due diligence, the negotiation and execution of a definitive agreement, and regulatory approval, where necessary. The parties have set a targeted closing date of March 31, 2025, although this date may be adjusted by mutual agreement.
"We are excited about the potential of this acquisition and the impact it will have on Rektron's strategic growth in the LPG sector," added Kolarov. "We look forward to the opportunity to work closely with the Batra Group as we continue to expand our global energy footprint."
