LHN Limited’s Coliwoo Spin-Off Approved: What Investors Must Know About the Strategic Move and Its Potential Impact

LHN Limited (SGX:41O), a Singapore-based space optimisation specialist, has received overwhelming shareholder approval for the proposed spin-off and listing of its co-living subsidiary, Coliwoo Holdings. The Extraordinary General Meeting (EGM) held on 9 September 2025 marks a pivotal moment for the company and its shareholders, with significant implications for future growth, capital structure, and share value.

Key Points from the EGM Minutes Investors Need to Know

• Shareholder Approval: Two ordinary resolutions were passed with near-unanimous support (99.99% in favour), authorising both the spin-off and a dilution of LHN’s stake in Coliwoo Holdings to facilitate the listing and capital raising.
• Spin-Off Details: Coliwoo Holdings will be listed as a separate entity, allowing it to raise funds independently for aggressive expansion. The company expects to increase its room inventory by 800–1,000 keys per year, with anticipated capital expenditure of S\$50,000 per room, excluding rental or acquisition costs.
• Funding Strategy: The spin-off is designed to enable Coliwoo Holdings to tap capital markets for growth without burdening the New LHN Group. The initial capital raising will be through the listing, with future possibilities for diversification into bank loans or bonds as the business scales.
• Business Focus: Coliwoo Holdings will remain focused on Singapore for the foreseeable future, citing global uncertainties. Overseas expansion (including Hong Kong and Malaysia) is on the horizon but not immediate.
• Group Structure and Independence: After the spin-off, Coliwoo Holdings and the New LHN Group will operate independently. LHN will retain majority control of Coliwoo Holdings but future transactions between the groups will be structured at arm’s length, with no joint projects or direct asset transfers.
• Financial Impact and Shareholder Value: The company expects its net asset value to increase following the listing, with the indicative market capitalisation for Coliwoo Holdings estimated at S\$257–S\$359 million. Although there may be temporary dilution, management projects that the funds raised and subsequent profit growth will offset this effect. Existing shareholders will not receive shares in Coliwoo Holdings directly, but LHN will continue to hold a majority stake, benefiting from its value creation.
• Management Changes: Lim Lung Tieng will step down as Group Managing Director of the parent company to serve as CEO of Coliwoo Holdings, while remaining Executive Chairman of both entities. The current Executive Director and Group Deputy Managing Director will be promoted to Group Managing Director of LHN Limited.
• Asset-Light Model: The spin-off is not structured as a REIT since Coliwoo Holdings master-leases about 70% of its rooms and only acquires properties where value can be added, reinforcing an asset-light approach.
• Potential Conflicts and Shareholder Interests: Management acknowledged that the two entities will attract different shareholder profiles and pledged ongoing efforts to create value for both sets of shareholders. The company aims to incubate future growth opportunities and “unicorns” beyond Coliwoo Holdings.
• Market Feedback and Cornerstone Investors: Marketing efforts to attract cornerstone investors are ongoing, but details remain commercially confidential at this stage.

Important and Price-Sensitive Information for Shareholders

• No In-Specie Distribution: Shareholders will not receive Coliwoo Holdings shares or bonus shares; all funds raised will be retained within Coliwoo Holdings for growth.
• Major Dilution Approved: Up to 20% or more of LHN’s indirect equity interest in Coliwoo Holdings will be diluted, though LHN retains majority control.
• Short-Term Dilution Possible: The CFO cautioned that short-term dilution may occur, but is expected to be offset by the increased profits and value generated by Coliwoo’s expansion post-listing.
• Net Asset Value Expected to Rise: Management projects an increase in net asset value after the listing, with the Circular providing a range of possible market capitalisation for Coliwoo Holdings.
• Strategic Refocusing: Financial resources previously allocated to Coliwoo Holdings will now be reinvested in LHN’s remaining businesses, including industrial/commercial space optimisation, self-storage (Work+Store), facilities management, property development, and energy segments.

Shareholder Takeaways and Potential Share Price Impact

This spin-off is a transformative event for LHN Limited. By unlocking value in the high-growth co-living segment via Coliwoo Holdings, the parent company positions itself for increased net asset value, more focused capital allocation, and the potential to incubate the next growth engine. The move could attract new investors to both entities, potentially driving share price appreciation, especially if Coliwoo Holdings’ listing is well-received and delivers on growth expectations. However, the lack of direct distribution to current shareholders and the temporary dilution are notable risks. Investors should watch for further announcements regarding the listing, cornerstone investors, and expansion plans, as these could be catalysts for share price movements.

Conclusion

With the proposed spin-off and listing now approved and management outlining clear strategies for growth and capital allocation, LHN Limited and Coliwoo Holdings are entering a new phase. While there are short-term uncertainties, the long-term potential for value creation is significant, assuming operational execution aligns with management’s vision.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence and consult professional advisors before making investment decisions. The information herein is based on minutes of the EGM and publicly available documents as of 9 September 2025; future developments may affect the accuracy or relevance of these statements.

View LHN Historical chart here