Catalist-listed HGH Holdings has agreed to sell its 200,000 shares — or a 20% stake — in its wholly-owned subsidiary, Premium Concrete, for $2.4 million.
The company had entered into a share purchase agreement (SPA) with Lim Kui Teng, founder of private construction company, Chuan Lim Construction, on March 19, said HGH on the evening of March 21. The SPA is conditional upon obtaining United Overseas Bank’s (UOB) written consent in connection with the change in shareholder and management per a facility letter dated June 13, 2024.
According to HGH, the proposed disposal is in the company’s “best interests” given that it is expected to strengthen the relationship with Chuan Lim, a customer and supplier of Premium Concrete.
The proposed disposal is also expected to bring about operational and commercial synergies including “continued truck maintenance and repair services, ongoing supply of raw materials and collection of sludge and continued concrete supply to Chuan Lim’s projects”.
The disposal is expected to allow Premium Concrete to tap into Chuan Lim’s network of earthwork, building, and infrastructure contractors and explore opportunities from Chuan Lim’s involvement in property development and the dormitory business.
The proposed disposal is likely to be completed within 14 business days after the signing of the SPA.
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On a pro forma basis, the proposed disposal will lift HGH Holdings’ net tangible assets (NTA) per share to 3.04 cents from 2.88 cents as at Dec 31, 2025, if the transaction had been completed on the same day.
If the proposed disposal had been completed on Jan 1, 2025, HGH Holdings’ earnings per share (EPS) for the FY2025 ended Dec 31, 2025, would have been lowered to 0.27 cents from 0.29 cents originally.
In FY2025, Premium Concrete reported net liabilities and net tangible liabilities of $3.45 million and $3.49 million respectively. The proposed disposal will be accounted for as an equity transaction and as such, there will be no gain or loss arising from the transaction.
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Based on an independent valuation report by Baker Tilly Consultancy, the estimated market value for Premium Concrete’s full stake ranged between $12.1 million and $12.5 million as at July 31, 2025, on a controlling and non-marketable basis.
Shares in HGH Holdings closed 0.1 cent lower or 5.56% down at 1.7 cents on March 20.
