Tat Hong falls into the red in Q2; announces rights issue to raise S$41m

MARKET weakness and poor utilisation of cranes weighed down results for Tat Hong Holdings in its second quarter.

It sank into the red, chalking up a net loss of S$5.4 million, from a net profit of S$4.4 million in the previous year, the group said in a Singapore Exchange filing on Monday.

For the three months ended Sept 30, 2016, revenue dropped 20 per cent to S$109.8 million from the preceding year. The drop in revenue was due to lower utilisation of cranes in Singapore and Australia, that affected its crane rental business, and lower demand for cranes in Singapore, Hong Kong and overseas markets, that pulled down the distribution division, it said.

It posted a loss per share of 0.86 Singapore cent, from earnings per share of 0.7 Singapore cent in the previous year.

Separately, the group announced it is undertaking a rights issue to raise up to S$41.1 million in net proceeds for debt repayment and working capital.

The company is proposing to issue up to 125.8 million new shares at S$0.33 each, representing a 27.5 per cent discount to the closing market price of S$0.455 on Nov 14.

The rights issue will be fully underwritten, with Phillip Securities having been appointed the underwriter.

The group's managing director and CEO, Ng San Tiong, and other parties acting in concert have also provided irrevocable undertakings to subscribe for up to 77.6 per cent of the total maximum number of rights shares.