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Koyo unit to buy property for engineering fabrication for S$2.54m

KOYO International's subsidiary has exercised an option to purchase a property near Boon Lay for some S$2.54 million, the engineering firm said in a regulatory filing on Monday. 

Koyo Engineering (SE Asia) has paid a deposit of S$246,380 to the vendor, Stone Industrries (FAB), upon exercise of the option to purchase the development at 4 Kwong Min Road.

The purchase price was arrived at after arm’s length negotiations, after taking into consideration the property's S$2.5 million indicative market value as at Oct 21, 2019, based on a valuation report by an independent third party. 

Koyo International said the property is intended to be used for engineering fabrication and pre-fabrication of mechanical, electrical, and plumbing modules for use in one of its existing projects.

The property, with a gross floor area of about 3,800 square metres, includes part of a factory building comprising a single-storey workshop with an overhead crane, and an annex with a showroom/office/dormitory.

It is also expected to improve the company's operational efficiencies as the close proximity of the dormitory and workshop would facilitate smoother workflow, and the group would be able to enjoy cost savings since it would not need to rent a factory and dormitory for the duration of the project, Koyo added. 

The property sits on land under the Jurong Town Corporation (JTC), with a leasehold tenure of 60 years with effect from Oct 1, 1966.

Purchase of the property is subject to approvals from JTC, the National Environment Agency, and/or any other relevant authorities, Koyo said. 

In the event that the approvals are not granted, the option may be terminated and the vendor shall refund all monies paid by the company, including the deposit. 

As at 9.40am on Monday, Koyo shares were trading flat at 6.7 Singapore cents.