Independent oil explorer Loyz Energy on Friday said it had entered into a memorandum of understanding with investment firm Arctos Investments Pte. to form a joint venture company.
The joint venture company to be named "FIT Global Pte Ltd" will focus on fund management, investments and trading, it said in a statement.
FIT shall be incorporated with an issued and paid-up share capital of S$1 million, which Loyz Energy will invest in cash while Arctos Investments shall contribute by ways of its network, team of investment and trading professionals, and risk management expertise.
FIT will focus on activities such as private equity deals, initial public offerings, fixed income, trading of equities, commodities and other financial instruments, fund management; and market making for commodities.
"Through our efforts in streamlining non-performing oil and gas assets, the Group is left with our 20 percent stake in the producing onshore oilfields in Thailand. We are entering into a new business to augment our income and cash flows...," Chief Executive Officer Jeffrey Pang said in a statement.
This proposed diversification of business of the group is expected to see the company expands not just beyond investment holding of earnings accretive businesses, but also into investment management, Pang said in a statement.
"We expects to work towards expanding the Group's earnings base with stable income through fund management fees from the Proposed Joint Venture and potential gains from managed investments and trading in the markets," said Pang.
Arctos Investments shall assist FIT with the application for a fund management licence to the Monetary Authority of Singapore.
The company said it will be seeking approval from its shareholders for the proposed diversification of business via an extraordinary general meeting to be convened in due course.
Shares in Loyz Energy fell as much as 5.9 percent to S$0.016 on the Singapore Exchange. The stock has lost 20 percent of its value so far this year.