Kim Heng to sell equipment for S$12.5m

KIM Heng Offshore & Marine Holdings has agreed to sell two dozen cranes and two luffing jibs to privately owned Hup Hin Heavy Equipment for S$12.5 million.

Kim Heng said after Tuesday's trading close that the net proceeds after deducting professional fees and expenses of S$12.48 million will be used to fund working capital needs, expand its business and pay down bank loans.

The firm added that the divestment of these assets will result in a loss on disposal of S$455,000 after taking into account their aggregate net book value of S$12.96 million.

It estimated that on a proforma basis, this proposed divestment would lower its net gearing ratio as at Dec 31, 2017, to 0.165, down from 0.328.

Hup Hin is expected to pay S$625,000 as down payment by Nov 29, and the remaining S$11.88 million on completion of the transaction.

The agreement with Hup Hin is conditional on among other things such as obtaining the approval of loan from a financial institution.

Kim Heng last traded flat at S$0.081.