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GKE copes with death of division head, stock still buoyed by possible takeover

Chan Chao Peh
Chan Chao Peh8/28/2017 08:00 AM GMT+08  • 7 min read
GKE copes with death of division head, stock still buoyed by possible takeover
(Aug 28): Neo Cheow Hui, CEO of GKE Corp, was summoned to an urgent meeting last month with officials from PSA. The day before the meeting, Spencer Tuppani, who ran a unit of GKE called TNS Ocean Lines, had died after being stabbed at lunch time on Boon T
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(Aug 28): Neo Cheow Hui, CEO of GKE Corp, was summoned to an urgent meeting last month with officials from PSA. The day before the meeting, Spencer Tuppani, who ran a unit of GKE called TNS Ocean Lines, had died after being stabbed at lunch time on Boon Tat Street by his own father-in-law.

The incident, which happened on July 10, was naturally worrying for PSA because TNS provides manpower to help load and unload container vessels that call at PSA’s terminals. Indeed, it was worrying for shareholders of GKE too. GKE had completed the acquisition of TNS only in November last year, attracted by the stable, recurring income that it generated. The listed company paid the vendors of TNS, led by Tuppani, $9 million in new shares. This gave them a 7% stake in GKE. The largest shareholder of GKE is its chairman Chen Yong Hua, with a 10.62% stake, while the second- largest is executive director Qian Wen Hua, who holds 8.97%.

Under the terms of the acquisition by GKE, the vendors of TNS have guaranteed profits of at least $3.5 million for the three-year period to Nov 30, 2019. Besides PSA, TNS also has a contract to provide logistical services to SATS, which it secured late last year. In addition to owning TNS, GKE operates warehouses in Singapore and has a ready-mix concrete business in China. It also owns a 50% interest in an LPG carrier. For FY2017 to May 31, GKE reported revenue of $56.1 million and a loss of $1.85 million. For FY2016, the company reported revenue of $36.9 million and earnings of $5.9 million, thanks to the sale of a property.

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