Catalist-listed Koh Brothers Eco Engineering will welcome a new investor, Penta-Ocean Construction, through a private placement at 4.7 cents per share.
The group, on March 15, entered into a share subscription agreement with Penta-Ocean Construction Co, where the latter will subscribe for 810 million shares for a consideration of $38.07 million.
Penta-Ocean is a leading Japanese construction firm that specialises in coastal and waterfront projects. It is listed on the Tokyo Stock Exchange with offices around the world including Singapore, Japan, Hong Kong, Egypt, Malaysia and Thailand.
Following the allotment and issue of new shares, Penta-Ocean will hold a stake of between 25.06% to 28.84% of the enlarged issued and paid-up share capital in Koh Brothers Eco, depending on whether the outstanding 2017 warrants and 2018 warrants are exercised and the outstanding share awards are vested as at the date of completion.
The net proceeds will amount to some $36.87 million.
Following the issue of the new shares, Koh Brothers Eco Engineering’s parent company, Koh Brothers Group, will remain the company’s largest shareholder with a stake of between 54.54% and 54.99%.
“The private placement is in line with Koh Brothers Eco’s strategy to strengthen our financial position by increasing our capital base. This will provide the group with additional resources to bid for more capital-intensive projects and other potential growth opportunities,” says Koh Brothers Eco’s non-executive and non-independent chairman, Francis Koh.
“We warmly welcome Penta-Ocean, a strong investor with a global perspective, to Koh Brothers Eco. We see this strong support as an affirmation and endorsement of our business model and growth strategy. We remain steadfast in our commitment to enhance shareholder value, in preparation for our next phase of growth. Meanwhile, Koh Brothers Eco continues to focus on the smooth execution of the group’s order book of $676.3 million as at Dec 31,” he adds.
Both companies, in September 2017, jointly clinched a $520.0 million contract for the design and construction of the Deep Tunnel Sewerage System Phase 2 project.
The deal is subject to approval from SGX as well as shareholders in Koh Brothers Group and Koh Brothers Eco.
Shares in Koh Brothers Eco closed flat at 3.6 cents on March 15.
