Tiong Seng to purchase majority stake in loss-making engineering company for S$3.3m

TIONG Seng has agreed to acquire 51 per cent of electrical and mechanical engineering works provider, AMP Systems, for a consideration of S$3.3 million.

While the acquisition will result in a S$140,000 net loss attributable to Tiong Seng, the construction group said its board believes the transaction will benefit the group by allowing it to capitalise upon AMP's existing business.

The deal will also further augment Tiong Seng's technical and technological competencies while opening its construction arm to new green and sustainability opportunities in the built environment, said the group in a bourse filing on Monday (Jul 4).

Tiong Seng's acquisition of AMP will comprise a 20 per cent purchase of vendor shares from an existing AMP shareholder, and a capital injection to subscribe for new shares to be issued by AMP to complete the group's 51 per cent stake in the company.

Had the acquisition taken place in FY2021, the group's net tangible assets per share would have been 43.76 Singapore cents instead of 43.81 cents. Pro-forma earnings per share would remain unchanged at 11.37 cents.

Shares of mainboard-listed Tiong Seng ended Friday unchanged at S$0.128. 

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