An entity called LJHB Capital (S) is making a general offer for shares of construction company Keong Hong Holdings it does not already own at 38.4 cents each.
The offer price represents a modest premium of 3.8% over Keong Hong’s last traded price on Jan 20, before trading halt was called before market opened this morning (Jan 21).
The offer comes after LJHB acquired 44.7 million shares from Keong Hong’s chairman and CEO Ronald Leo Ting Ping.
Prior to this, LJHB already owns 62.8 million shares. Combined with the shares sold by Leo, LJHB has a total stake of 107.6 million shares, or 45.78%, which crosses the 30%-trigger point required for general offers to be made under Singapore market rules.
LJHB intends to keep the listing status of the company, which besides construction, runs two hotels each in Singapore and Maldives.
According to the offer announcement, LJHB is beneficially owned by one Liu Haiyan, and its board of directors, besides Liu, are Lin Junru and Chen Bin.
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As part of the deal, Leo will be keeping a stake of 27.7 million shares, equivalent to 11.8% of the company.
As at Sept 30 2021, the company’s net asset value was 67.8 cents per share, down 15% from 79.8 cents as at end of the preceding FY2020.
On Nov 29, the company reported that revenue for FY2021 ended Sept 2021 was up 2.9% y-o-y to $85.3 million.
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However, due to disruptions to activities from the on-going pandemic, it incurred higher operating costs.
As such, it reported a loss $19.3 million, slightly reduced from $18.8 million in the red for FY2020.
In the company’s earnings commentary, Leo says there’s “light at end of the tunnel.”
He observes that business sentiments have improved with accelerated vaccination programmes and borders reopening, including Singapore’.
“Our year has also closed positively as we have been awarded a contract for upgrading works to the Grand Hyatt Hotel Singapore, providing the group with a sustainable flow of activities for the next two years,” says Leo.
