PENTA-OCEAN Construction will be buying 810 million new ordinary shares of Koh Brothers Eco Engineering at S$0.047 per share, in a move for the sustainable-engineering solutions provider to strengthen its financial position to bid for higher value and more capital-intensive projects.

 

The Catalist-listed engineering company, in a regulatory statement on Monday, announced that the potential new investor, Japan-listed Penta-Ocean, will subscribe for 25.06 per cent to 28.84 per cent of the enlarged issued capital, the exact shareholding depending on whether outstanding warrants and employee stock awards are exercised or vested.

 

The net proceeds will amount to approximately S$36.87 million, with the investment to strengthen Koh Brothers Eco Engineering' s financial position, so that it can bid for more capital-intensive projects and pursue potential growth opportunities.

 

Koh Brothers Group, after the subscription by Penta-Ocean, will remain the largest shareholder of Koh Brothers Eco Engineering, with a stake of between 54.54 per cent and 54.99 per cent of the enlarged issued capital.

 

The deal is subject to approval from the Singapore Exchange to list the new shares, as well as shareholders of Koh Brothers Group and Koh Brothers Eco Engineering at separate extraordinary general meetings.

 

Between Sept 7 and 9, Koh Brothers Group managing director & group CEO Koh Keng Siang acquired 139,100 shares for a consideration of S$21,618.

 

At 15.50 cents per share, this increased his total interest in the listed company from 21.78 per cent to 21.81 per cent.

 

Mr Koh has been with the group since 1987 and has held various positions in administration, finance and project management.

 

He was the main driving force behind the expansion of the group' s business into real estate and leisure & hospitality.

 

Mr Koh is credited with spearheading the group to establish its brand name in Singapore as a builder of quality homes.

MAINBOARD-listed Koh Brothers Group and its Catalist-listed subsidiary Koh Brothers Eco Engineering both expect to report a net loss for the six months ended June 30, owing to the adverse impact of Covid-19, they said on Friday. 

 

" The imposition of circuit breaker measures by the Singapore government in April 2020 has severely impacted the group&rsquo s businesses. Although the circuit breaker measures have been gradually lifted, these measures will not be sufficient to restore business activities to pre-Covid-19 levels," the parent company said.

 

Koh Brothers Group' s revenue from the construction and building materials and real estate divisions have therefore been hit.

 

Koh Brothers Eco Engineering, which provides construction and civil engineering services under the Koh Brothers Group' s construction division, said that this sector was severely affected by the spike in Covid-19 infections among foreign workers living in dormitories.

 

Koh Brothers Eco Engineering said: " The stoppage of most of the group&rsquo s construction projects has caused delays to project schedules, increased project costs and disruption in project management."

 

The extent of the delays remains uncertain. Construction works did not immediately resume to their normal level of operations even after the circuit breaker period was lifted on June 1, as the group had to meet additional safe and controlled restart measures for each construction project, before work could resume.

 

" As a result of the aforementioned factors, the delay in the normalisation of the level of operations has weighed on the budgets of ongoing projects," Koh Brothers Eco Engineering said.

 

Koh Brothers Eco Engineering expects that it will continue to face a challenging landscape in the near-term, it said.

 

Koh Brothers Group and Koh Brothers Eco Engineering will both publish their first-half results on or before Aug 14.

CONSTRUCTION, property and engineering firm Koh Brothers Group (KBG) said it has sold 22 per cent - or 15 of the 69 units - of its freehold luxury residence Van Holland as at Wednesday.

 

This includes the 10 units moved during the Holland Village condo' s launch weekend in January.

 

KBG has built a 360-degree virtual tour of various units in Van Holland. This digital sales kit with interactive features serves to overcome the " difficulties presented" amid the Covid-19 outbreak, it said in a bourse filing.

 

That said, KBG expects a negative impact on its business and the group' s financial results for the current financial year ending Dec 31, 2020, in view of the pandemic and any unforeseen circumstances that may arise from it. The company added that it remains " financially prudent and maintains operational agility to conserve essential resources to prepare for the post-pandemic recovery process" .

 

Separatey, Koh Brothers Eco Engineering (KBEE) disclosed that the Singapore Exchange (SGX) has no objection to the proposed spin-off of its unit Oiltek. KBEE is, however, reviewing this plan in view of the Covid-19 pandemic and market sentiment.

 

KBG had a 77.29 per cent stake in KBEE as at March 19, 2020, according to KBEE' s latest annual report.

 

In January this year, KBEE said it planned to spin off its 80 per cent-held indirect subsidiary Oiltek and list it either on SGX' s Catalist board, or on Bursa Malaysia' s Ace Market.

 

The proposed listing will also include Oiltek Nova Bioenergy, a subsidiary of Malaysia-based Oiltek. These companies are involved in the business of building edible oil refining plants and providing related services to clients across 32 countries.

 

In a regulatory filing on Wednesday, KBEE said it is " not too concerned" about project cancellations or defaults by clients due to Covid-19 as its clients are primarily government agencies or government-linked entities.

 

Meanwhile, KBG' s proposed dividend has been reduced to 0.25 Singapore cent from 0.4 Singapore cent, whereas KBEE' s proposed dividend has been reduced to 0.02 Singapore cent from 0.05 Singapore cent.

 

In light of this, the shareholders of both companies had asked if the proposed director fees and management remuneration could be similarly reduced " in the spirit of alignment of interest" .

 

KBG and KBEE separately said that they have implemented a headcount freeze and that executive directors, management and staff have taken a pay cut with effect from April this year.