Enviro-Hub incorporates JV company with controlling shareholder

ENVIRO-HUB Holdings L23 : L23 0%announced on Thursday (Dec 9) that its indirect wholly-owned subsidiary has incorporated a company in Malaysia through a joint venture with its controlling shareholder Law Siau Woei.

The indirect wholly-owned subsidiary, Pastel Glove, has a 40 per cent stake in the joint venture company known as Pastel Care Sdn Bhd, while Law has a 60 per cent stake.

Pastel Care's initial issued and paid-up share capital is RM10 (S$3.24) comprising 10 ordinary shares. Its key business activities will be the retail sale of pharmaceuticals, medical and orthopaedic goods.

Its incorporation, funded through internal resources, is not expected to have any material impact on net tangible assets (NTA) per share and consolidated earnings per share of the group for the financial year ending Dec 31.

The proposed joint venture between Pastel Glove and Law is subject to negotiations and there is no certainty that they will proceed with the pharmacy business, or if a definitive joint venture agreement will be entered, said Enviro-Hub in the bourse filing.

Law, as a controlling shareholder owning 18.5 per cent of Enviro-Hub's shares, is regarded as an "interested person" based on the mainboard rules of the Singapore Exchange. Meanwhile, Pastel Glove, being a subsidiary of Enviro-Hub, is regarded as an "entity at risk".

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

Therefore, the incorporation of the joint venture company is regarded as an interested person transaction.

However, as the value of the transaction is less than 3 per cent of the group's latest NTA value and is less than S$100,000, Enviro-Hub is not required to make an announcement or obtain shareholder's approval under mainboard rules.

The company's audit and risk committee has reviewed the incorporation of Pastel Care and is of the view that it is not prejudicial to the interests of the company and its minority shareholders, Enviro-Hub said.

Shares of Enviro-Hub closed flat at S$0.068 on Dec 8.