UOB acquires 28.66% stake in Hoe Leong Corp

HOE Leong Corp will become an associated company of United Overseas Bank (UOB) after the bank acquired a 28.66 per cent stake in Hoe Leong, following a scheme of arrangement.

Some 1.61 billion shares in Hoe Leong were alloted to the bank at a price of S$0.0115 per share, totalling about S$18.52 million.

The heavy equipment supplier had proposed the scheme of arrangement last year to restructure debt owed to bank creditors and its controlling shareholder, Hoe Leong Co.

In a separate announcement to the Singapore Exchange on Wednesday, Hoe Leong Corp said that it had allotted and issued some 4.99 billion scheme shares - which are expected to be listed on the Singapore Exchange on May 10 - to creditors. As a result, however, its free float has fallen below 10 per cent to approximately 7.33 per cent.

Under the listing rules, the Singapore Exchange could suspend trading in Hoe Leong's shares, it highlighted, but added: "The SGX may allow the company a period of three months or longer to restore its public float to at least 10 per cent, and in the event that the company is unable to do so within such period, the SGX may remove the company from the official list. The company has communicated with the SGX on the matter, and will provide an update as appropriate regarding the public float."