Continue reading this on our app for a better experience

Open in App
Home News Company in the news

Boldtek to divest wholly-owned subsidiary to Malaysian businessman

Felicia Tan
Felicia Tan • 3 min read
Boldtek to divest wholly-owned subsidiary to Malaysian businessman
The consideration to be paid for Logistics Construction will be a “fair” number to be agreed between Boldtek and the purchaser group. Photo: Boldtek
Font Resizer
Share to Whatsapp
Share to Facebook
Share to LinkedIn
Scroll to top
Follow us on Facebook and join our Telegram channel for the latest updates.

Boldtek has entered into a non-binding term sheet with Ee Chin Keong to divest its wholly-owned subsidiary, Logistics Construction on Nov 16.

Ee is a businessman from Malaysia who is construction and material handling equipment industry. His businesses are mainly involved in steel fabrication engineering works, mechanical and electrical engineering works, custom-made overhead crane, gantry crane, goods hoist, scissor lifter, service and maintenance of lifting equipment.

According to Boldtek, Ee is interested in investing in a Singapore-based construction company with a construction license that is able to bid for large scale projects.

“From Mr Ee’s perspective, this is a relevant business vertical along the value chain and would allow him to diversify his portfolio of businesses into a different region with lower risk in South-east Asia. [Logistics Construction] fits this profile,” says Boldtek via its statement issued on Nov 19.

Logistics Construction has been granted a moratorium under Section 64 of the Insolvency Restructuring and Dissolution Act 2018 but that expired on Nov 14.

Ee is said to be aware that Logistics Construction is present insolvent. He intends to restructure its liabilities following the proposed divestment with his group of nominees and investors (the purchaser group).

See also: MAS and CAD probing Seatrium under SFA over Operation Car Wash

The consideration to be paid for Logistics Construction will be a “fair” number to be agreed between Boldtek and the purchaser group.

The completion of the divestment is subject to the completion of several conditions including the satisfactory result of financial and legal due diligence, the agreement on the terms of a restructuring plan, the obtaining of relevant corporate approvals and regulatory approvals.

After the divestment is completed, the purchaser group will provide a $1 million loan facility to be drawn down as and when required by Logistics Construction. The amount will be used as working capital to continue ongoing projects for the purpose of realising Logistics Construction’s existing contract assets.

See also: Mooreast takes out $20 million convertible loan

The purchaser group also understands that with the benefit of the loan facility, about $3 million in value of Logistics Construction’s contract asset can be realised within a time period of up to two years. The proceeds from the realisation from the existing contract assets, up to a maximum value of $3 million, shall be set aside and deposited in a trust account and held for the benefit of the trade creditors.

At the end of up to two years after the first drawdown of the $1 million facility, or upon the proceeds in the trust account being more than $3 million, the proceeds in the trust account will be distributed to the trade creditors on pro-rated basis. Any amount in excess of $3 million shall be disbursed in such manner determined by the purchaser group.

In a separate statement, Boldtek announced that Logistics Construction has filed an application under Section 91 of the Insolvency, Restructuring and Dissolution Act 2018 to be placed under judicial management.

Shares in Boldtek closed at 3.5 cents on Nov 17.

×
Loading next article...
The Edge Singapore
Download The Edge Singapore App
Google playApple store play
Keep updated
Follow our social media
© 2024 The Edge Publishing Pte Ltd. All rights reserved.