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Allied Tech halts trading pending announcements

PRECISION engineering company Allied Technologies on Friday morning requested a trading halt, pending the release of announcements. 

Earlier this week, the Catalist-listed firm said it has received a letter of intent for the proposed acquisition of "one of the largest dormitory operators in Singapore" for S$130 million that could result in a reverse takeover.

The company had said that its board was still reviewing the terms of the proposed deal as contained in the letter dated April 25 from Lim Yew Ming, the vendor.

It was also considering the information on the target company Aik Chuan Construction Pte Ltd, a construction, development and dormitory operator, said Allied Tech chief executive and executive director Clement Leow Wee Kia in a statement on Monday.

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Mr Lim has represented that he wholly owns Aik Chuan Construction, which has been in operation since the early 1980s.

The proposed acquisition of the target company - as indicated in the letter - that is intended to be a basis for negotiations, will be satisfied by between S$30 million and S$50 million in cash, with the balance through the issue and allotment of new Allied Tech shares at an issue price not exceeding one Singapore cent per share.

The terms of the proposed acquisition have not been finalised, and no binding agreement has been entered into while the letter of intent has not been executed by the company.

Two weeks ago, Allied Tech warned that it is expected to report a net loss for 2018, attributing it mainly to impairment losses on certain assets which are expected to be greater than the profits generated from operations.

It has also applied for a time extension to hold its annual general meeting for the financial year ended December 2018, in light of the expected impairment losses and to announce its results for the first quarter ended March 2019.

Allied Tech’s stock closed flat at 1.1 Singapore cents on Thursday.