Keong Hong unit to sell stake in Katong Holdings for S$34.5 million
The group intends to utilise the net proceeds from the divestment for its working capital requirements and potential business opportunity
KEONG Hong Construction, a wholly-owned subsidiary of Keong Hong Holdings, entered a non-binding agreement with private company MCSK for the proposed disposal of 20 per cent of the issued and paid-up share capital of Katong Holdings on Nov 8.
This entails 200,000 ordinary shares of Katong Holdings, with the consideration for the disposal set at S$34.5 million.
On Dec 3, both Keong Hong Construction and MCSK entered a further agreement to arrange a definitive sale and purchase agreement regarding the proposed disposal.
The construction player estimates that the total net proceeds from the divestment will be approximately S$34.3 million, comprising proceeds from the proposed sale less estimated expenses of approximately S$200,000. .
The consideration represents a net deficit of S$15.1 million over the aggregate book value.
The net comprehensive loss attributable to the sale shares and the sale loans is also S$15.1 million, due to the loss on de-recognition of financial assets at Fair Value through Other Comprehensive Income for sale shares of S$29.8 million, offset by the gain on disposal of financial assets at Fair Value through Profit or Loss for the sale loans of S$14.7 million.
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Accordingly, the loss on disposal will be S$15.1 million.
The group intends to utilise the net proceeds from the divestment for its working capital requirements and potential business opportunity.
The company’s market capitalisation is around S$18.8 million, as of the full market day preceding the date of the agreement to purchase.
Katong Holdings is a Singapore-incorporated company primarily engaged in the business of property and hotel ownership and development. It was incorporated on Feb 13, 2014.
Keong Hong made a request to lift its trading halt at 11.07 am on Tuesday, Dec 10. Its share price had closed flat on Dec 4 at S$0.095.
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Originally published by businesstimes.com.sg. Syndicated material does not necessarily reflect the views of Vanity Fair Fashion.
