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Koh Brothers Eco Engineering mulls spin-off, listing of unit
KOH Brothers Eco Engineering is exploring the possibility of spinning off its majority-owned indirect subsidiary Oiltek and listing it on either the Catalist board of the Singapore Exchange (SGX), or on Bursa Malaysia's ACE Market.
Koh Brothers Eco Engineering's shareholding in Oiltek is about 80 per cent. Oiltek's wholly-owned subsidiary Oiltek Nova Bioenergy will also be spun off for the proposed listing.
The spun-off entity has based its operations in Malaysia, and is involved in the engineering, procurement, construction and commissioning of edible oil refining plants.
It is also involved in the designing, building and supplying of biogas recovery plants to palm oil mill effluent plants, and provides its services to global clients spanning 32 countries.
SGX has advised that it has no objection to the proposed spin-off, subject to certain conditions. These include disclosing to shareholders the basis for the board's assessment that the proposed spin-off and listing would bring about benefits to shareholders, and getting shareholders to approve the proposed spin-off at an extraordinary general meeting.
The group cautioned shareholders that the proposed spin-off is at a preliminary stage and the company has not formally appointed any professional advisers, save for the legal advisers to the company, for it.
Meanwhile, Koh Brothers Eco Engineering separately announced a net profit of S$2.9 million for the fourth quarter ended Dec 31, up 44 per cent from a year ago.
This was despite a 29 per cent fall in revenue to S$82 million, mainly due to lower revenue from the engineering and construction division as certain construction projects were nearing their completion stage in FY2019.
The group's gross profit rose 48 per cent to S$5.7 million mainly due to the bio-refinery and bio-energy division, which saw higher profit margin from Africa.
Earnings per share was 0.16 Singapore cent, higher than 0.13 cent a year ago.
The counter closed at S$0.05 on Thursday, down 0.2 cent or 3.85 per cent.