TLV Holdings proposes name change to Taka Jewellery Holdings, diversify into moneylending

TLV Holdings announced on Thursday that it is proposing to change its name from TLV Holdings to Taka Jewellery Holdings to increase shareholders' awareness of its better-known jewellery businesses.

The company has already received approval for its application to the Accounting and Corporate Regulatory Authority (Acra). The name will be reserved until Jan 11, 2022.

In its regulatory filing, the company said that it also intends to diversify into the moneylending business. TLV said that it would provide loans to corporations for working capital requirements, as well as providing mezzanine loans for corporations to finance their expansion and acquisition plans.

Mezzanine loans are a hybrid of debt and equity financing and give TLV the right to convert or acquire an equity interest in the borrower in addition to interest income. Shares of the borrowing corporation may also be held as collateral for loans.

TLV said that these services fall under the definition of "excluded moneylender" and will not require any licences or approvals under Singapore's Moneylenders Act.

The move comes as the board believes the moneylending business will allow TLV to efficiently utilise its earnings generated from its existing businesses to potentially provide recurring interest income that will improve the company's profitability and long-term growth.

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In 2018, the company had identified moneylending as a potential area of expansion as it is complementary to its existing business activities. It first ventured into offering term loans to corporations then. 

The company also continues to provide lending through its Top Cash pawnshops against collaterals not limited to gold and diamond jewellery.

The company currently has three other existing business activities in jewellery exhibitions, retail jewellery sales under the Taka Jewellery and Top Cash brands and pawnbroking of pre-owned jewellery under the Top Cash brand.

For the full year ended June 30, 2021, the group made a net profit of S$2.4 million, a turnaround from the loss of S$393,000 the group reported in the 15 months ended June 30, 2020. However, revenue declined by 15 per cent to S$96.8 million in the same period.

The company attributed the decline in turnover to international travel restrictions and a challenging business environment amid the Covid-19 pandemic. As a result, revenue for the wholesale and exhibition business declined 48 per cent to S$25.6 million. 

The group’s retail business made up 70.5 per cent of the company’s revenue, while the financial services and wholesale and exhibition business revenue constituted 3.1 per cent and 26.4 per cent of revenue respectively.

As the business diversification plans change the risk profile of TLV, the company will convene an extraordinary general meeting to seek shareholders' approval for both the diversification plans and the name change. Shareholders will receive a circular in due course.

TLV shares closed flat at S$0.066 on Friday.