The first proposal includes discussing the distribution of all the shares that Koh Brothers Group's subsidiary Koh Brothers Eco Engineering(KBE) in Oiltek International, which recently received in principle approval to transfer its listing to the Mainboard of the SGX, to KBE and then onto KB shareholders.
The second is to appoint a financial advisor to explore options to unlock shareholder value.
SIAS says that shareholders of KB have raised several concerns with regards to unlocking shareholder value of late. This includes the performance of KBE, which has reported losses in recent years and which contributes the large majority of KB's revenue.
Shareholders are also concerned about the lack of ongoing property developments by KB of late, and that its sole hospitality asset, Oxford Hotel, is a 130-room hotel which has poor ratings on hotel booking websites and ranked #342 out of #353 hotels in Singapore on Tripadvisor.
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Shareholders also question whether it is opportune for KB to consider selling its stake in Sun Plaza, given that capital values are currently high, using the recent sale of Northpoint for reference.
Finally, shareholders question if KB's board size of nine directors is excessive and whether some of the directors, who sit on boards of companies that operate in the same industry as KB, are conflicted. This is in contrast with larger blue chip companies like DBS which has 10 directors.
Given that KB's 37.35% stake in Oiltek is worth about $67 million in contrast to the market capitalisation of KB which stands at $58 million, SIAS notes that the market does not have an overly positive view of KB.
Shares in Koh Brothers Group closed 0.3 cents lower or 2.128% down at 13.8 cents on Apr 25.
