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Notes to the
financial statements
For the financial year ended 31 December 2018
114
B A K E R T E C H N O L O G Y
L I M I T E D
12.
Investment in subsidiaries (cont’d)
(d)
Acquisition of subsidiary (cont’d)
The Group has elected to measure the non-controlling interest at the non-controlling
interest’s proportionate share of CHO’s net identifiable assets.
The purchase price allocation exercise in respect of the acquisition of CHO was completed
by an independent valuer during the financial year. No intangible assets have been identified
arising from this acquisition. The fair values of the net assets and liabilities acquired at the
date of acquisition were as follows:
Fair value
recognised on
acquisition
$’000
Property, plant and equipment
120,289
Investment in associates
8,143
Loan to associate
4,629
Inventories
212
Trade and other receivables
20,424
Cash and cash equivalents
5,089
Loans and borrowing
(12,500)
Trade and other payables
(10,195)
Deferred tax liabilities
(5,403)
130,688
Less: Non-controlling interest
(58,866)
Net assets acquired
71,822
Bargain purchase gain
(24,709)
Total consideration paid
47,113
Less: Cash and cash equivalents of subsidiary
(5,089)
Net cash outflow from acquisition of subsidiary
42,024
The acquisition was fully settled in cash.
Transaction costs related to the acquisition of approximately $520,000 have been recognised
in the “Administrative expenses” line item in the Group’s profit or loss for the year ended 31
December 2018.
As the consideration paid by the Group was significantly lower than the net tangible asset
value per CHO shares, this acquisition resulted in a bargain purchase gain of approximately
$24.7 million, which have been recognised in the “other income” line item in the Group’s
profit and loss for the year ended 31 December 2018.