Koh Bros unit enters into JV with Malaysian parties

ENGINEERING and construction group Koh Brothers has entered into a joint venture (JV) with two Malaysian parties, which will see it paying RM7.5 million (S$2.5 million) in relation to the purchase of a plot of land.

Koh Brothers announced on Tuesday that its wholly-owned subsidiary, Changi Properties Pte Ltd, has signed a conditional JV agreement with Global Skyline Sdn Bhd (GS) and its wholly-owned special-purpose vehicle, Global KB Venture Sdn Bhd (GKV), to subscribe for new ordinary shares in GKV.

Under the agreement, GS will transfer its leasehold interest of a development land known as Plot A27 in Johor Bahru, Malaysia, to GKV, at a consideration of some RM35.96 million.

The plot has a 99-year lease tenure, starting from Nov 1, 2014, with a gross floor area of about 449,539 square feet on the land parcel. GKV intends to develop the plot into a mixed-use property.

Upon the completion of the proposed subscription, Changi Properties will own 25 per cent of the enlarged share capital of GKV, with GS owning the rest.

Changi Properties' total investment in GKV will amount to just under RM7.49 million and will be made through a subscription of new shares and a shareholder's loan. Changi Properties will pay GKV RM250,000 for the issue of 250,000 shares in GKV to Changi Properties, under the JV agreement; Changi Properties will also advance some RM7.24 million to GKV to be used as part payment of the acquisition of the plot.

Shares of Koh Brothers ended one cent up at S$0.345 on Tuesday.