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TEE Intl proposes sale of TEE Land stake to Amcorp unit for S$50.62m
MAINBOARD-LISTED TEE International has entered into a conditional agreement to sell its 63.28 per cent stake in TEE Land to a unit of Malaysia's Amcorp Group for S$50.62 million in cash or S$0.179 per share.
Separately, TEE International controlling shareholder and former chief executive Phua Chian Kin has also entered into a conditional agreement with Amcorp to sell his 5.5 per cent stake in TEE Land, comprising about 24.6 million shares, at the same price, the company disclosed in a Monday bourse filing. (see amendment note)
The S$0.179 price represents a 9.1 per cent premium to the S$0.164 closing price of TEE Land on Jan 8, and a 5.9 per cent premium to the last transacted price on Jan 9, prior to a trading halt. The sale is expected to be completed by Apr 13.
Excluding expenses, TEE International expects net proceeds of S$48.27 million from the sale of its TEE Land stake. It plans to use the cash to reduce its leverage, improve working capital or for other strategic investments. The divestment will also help it focus on the core engineering business, TEE International said.
After the sale, TEE International will also enter into agreements with TEE Land to purchase TEE Industrial and for certain transitional services. The TEE Industrial acquisition will require shareholder approval at an Extraordinary General Meeting.
Once the conditions of the agreement are fulfilled, Amcorp will make a mandatory unconditional cash offer for all the remaining shares in TEE Land not presently owned, at the same price of S$0.179 per share. Amcorp intends to maintain TEE Land's SGX listing.
"The disposal of our stake in TEE Land will help to improve TEE Group's financial position, free up cash to be used in our core engineering and infrastructure businesses, as well as other complementary businesses. We can also make strategic investments or acquisitions that can help us progressively build our recurring revenue streams," said Eric Phua, the interim chief executive of TEE International, who took over from Mr Phua.
Mr Phua was relieved of his role as chief executive and managing director in September last year, after the company started investigating unauthorised transactions totalling S$6.55 million made by subsidiaries to related parties. The transactions were allegedly made under the instruction of Mr Phua. Later that month, TEE International appointed an external investigator to look into the matter.
TEE International shares last traded at S$0.064 before the halt, while TEE Land shares closed at S$0.169.
Amendment note: An earlier version of this article incorrectly stated that Phua Chuan Kin's 5.5 per cent stake in Tee Land comprises 25.6 million shares. It is in fact 24.6 million shares. The article above has been revised to reflect this.