OIO Holdings plans to sell its loss-making subsidiary DLF Engineering to one of its own executive directors, Fan Chee Seng, for $5,000.
Prior to OIO was listed as DLF Holdings back in 2018 with DLF’s original engineering business, started by, Fan, as its core.
When the engineering business worsened, the company then diversified into blockchain-based businesses and along with it, Fan’s stake was diluted.
Fan continues to hold a 12.2% stake in the enlarged share base of the company, renamed OIO Holdings.
OIO’s divestment of DLF Engineering is not a surprise. When asked about the future of this business in May, another of OIO’s executive directors, Yusaku Mishima, said that the company is “considering all options”.
He added that focusing on the blockchain business allows OIO to be very “asset-light”, in contrast to the more cost-intensive engineering business.
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For FY2021 ended Dec 2021, DLF Engineering recorded a net loss of $128,528. For the quarter ended March 31, it remained in the red with a loss of $97,877. Its net asset value as at March 31 was a negative $1.74 million.
According to OIO Holdings, DLF Engineering is not likely to “generate any future economic benefit” and that with the sale, its own financial position can improve.
