Koh Brothers, Heeton Land sell off joint venture for S$41.6m

CONSTRUCTION and engineering firm Koh Brothers Group, together with another stakeholder, has sold off their joint venture, Buildhome Pte Ltd, for S$41.6 million.

Mainboard-listed Koh Brothers' wholly owned subsidiary, Koh Brothers Development Pte Ltd, and Heeton Land Pte Ltd, which is wholly owned by Heeton Holdings, have sold their respective 50 per cent stakes in Buildhome to Singapore-incorporated Central Core Pte Ltd, said Koh Brothers in a filing to Singapore Exchange on Wednesday evening after the market closed.

Koh Keng Siang, managing director and group chief executive officer and a controlling shareholder of the company, is also a director of and has a 25 per cent shareholding interest in Central Core.

Buildhome developed and owned the property development known as The Lumos at 9 Leonie Hill in Singapore. A balance of 36 residential units remain unsold as at Wednesday.

The consideration of S$41.6 million for the disposal was arrived at on a willing-buyer, willing-seller basis with reference to the unaudited financial statements of Buildhome as at Feb 28 this year, and the agreed value of S$185.6 million for The Lumos, said the release.

Part of the sum has been paid equally to Koh Brothers Development and Heeton Land, with S$30 million in cash paid on July 19. The remaining S$11.6 million will be deferred to after completion, which shall be novated to the shareholders of Central Core.

Koh Brothers said the disposal is expected to contribute positively to its consolidated net tangible assets and earnings per share for the financial year ending Dec 31, 2017.

At the same time, Buildhome has refinanced the property with its existing lender. In addition, as part of the transaction consideration, Koh Brothers Development and Heeton Land have agreed to convert the outstanding shareholders' loans to Buildhome aggregating S$36 million into a three-year promissory note bearing interest at 5 per cent per annum.

Koh Brothers' counter closed on Wednesday unchanged at S$0.29 before the announcement.