LHN Logistics lodges preliminary offer document

LHN Logistics lodged its preliminary offer document on Wednesday (Mar 30) as its parent company, property player LHN 41O , seeks its spin-off and listing on the Catalist board of the Singapore Exchange (SGX).

The document states that part of the gross proceeds raised from the placement will go towards the logistics-services group's plans to increase its scale of operations by growing its transportation fleet.

LHN Logistics intends to buy at least 20 additional prime movers and at least 70 trailers to better support its customers who require cross-border transportation services between Singapore and Malaysia. Such acquisition will be made progressively over a period of 2 years from this year, the document stated.

The rest of the proceeds will go towards expansion plans. These include plans to build an ISO tank depot at its logistics property in Gul Avenue, which will provide chemical cleaning and repair services for ISO tanks, empty ISO tank-storage services and laden ISO tank-storage services for hazardous substances, and petroleum and flammable materials. (An ISO container is an international intermodal container manufactured according to the specifications outlined by the International Organization for Standardization (ISO). ISO containers are suitable for use on ships, trains and trucks.)

This would further expand and enhance LHN Logistics' value-added transportation services, said the document.

There are also plans to expand the group's business to more countries in the Asean region as and when opportunities arise, be these in the setting up of new subsidiaries, acquisitions, joint veneers or strategic alliances, the document said.

"We believe that these avenues of expansion will give us access to new markets and customers as well as new businesses," it added.

As LHN Logistics is already undertaking preparatory works to establish an overseas container depot in Yangon in Myanmar, the document included a clarification that it does not intend to utilise any of the placement proceeds for expansion into Myanmar.

PrimePartners Corporate Finance is listed as LHN Logistics' sponsor, issue manager and co-placement agent. CGS-CIMB Securities (Singapore) is the other placement agent.

The development follows LHN's applications to the Stock Exchange of Hong Kong and Singapore Exchange Securities Trading last November to spin off and separately list the shares of LHN Logistics in Singapore.

Apart from the logistics business, which comes under LHN Logistics, LHN houses 2 other business segments, centred on space optimisation and facilities management. All 3 segments are separate and distinct.

If the proposed spin-off is successful, LHN will continue to hold majority shareholding in LHN Logistics, which will continue to be consolidated with the group, LHN had said.

Shares of LHN closed up 9.1 per cent or S$0.03 at S$0.36 before the announcement on Wednesday.