GKE Corporation Announces In-Principle Approval for Potential Spin-Off and Catalist Listing of Infrastructural Materials & Services Business

Key Highlights

• GKE Corporation Limited intends to spin off its infrastructural materials and services business by way of an initial public offering (IPO) and listing on the Catalist Board of the Singapore Exchange Securities Trading Limited (SGX-ST).
• The SGX-ST has no objection in principle to the proposed spin-off, subject to compliance with its listing requirements and guidelines.
• The spin-off will involve the listing of GKE Holdings (HK) Co., Limited (GKEH) and its subsidiaries, with the formation of a new Singapore investment holding company expected to be the listing vehicle.
• GKE Corporation has appointed RHT Capital Pte. Ltd. as its financial adviser and continuing sponsor for the proposed spin-off and listing.
• Shareholder approval will be sought if GKE’s effective shareholding in GKEH is expected to be diluted by 20% or more.
• The proposal remains subject to market conditions, regulatory approvals, and successful preparatory work, with no assurance on timing or completion.

Detailed Report

GKE Corporation Limited (the “Company”), a Singapore-based integrated supply chain solutions provider, announced its intention to spin off its infrastructural materials and services business through a proposed IPO and listing of GKE Holdings (HK) Co., Limited (“GKEH”) on the Catalist Board of the SGX-ST. The proposed spin-off remains at a preliminary stage, with the structure of the listing yet to be finalized.

Background and Business Overview

GKE Corporation’s operations are organized into two main segments:

• Warehousing & Logistics: Provision of integrated supply chain solutions, including warehousing, freight forwarding, transportation, chemical handling, and port management, serving various industries locally and globally.
• Strategic Investments:
  • Infrastructural Materials & Services – Manufacturing and supply of environmentally friendly ready-mix concrete and building materials.
  • Others – Indoor farming solutions and distribution of telecommunications mobile handsets and accessories.

The infrastructural materials & services business, conducted through GKEH (incorporated in Hong Kong in 2012), is primarily involved in the production and manufacturing of environmentally friendly lightweight bricks, building materials, and cement products, mainly in the People’s Republic of China.

Proposed Spin-Off Structure and Rationale

The spin-off is intended to unlock shareholder value by enabling the infrastructural materials & services business to operate independently and access capital markets directly. The proposed listing will be through a newly incorporated Singapore investment holding company, which will ultimately hold the GKEH Group.

The proposal’s structure—including the proportion of shares to be offered and the final dilution to GKE’s interest—has not been finalized. However, the company expects that its effective shareholding in GKEH may be diluted by 20% or more upon completion of the proposed listing. In such a case, shareholder approval will be sought via a general meeting.

The spin-off and listing are dependent on:

• Favourable market conditions
• Completion of preparatory work
• Regulatory and third-party approvals

There is no assurance at this stage that the spin-off or listing will be implemented or completed.

Shareholder Considerations and Potential Price Sensitivity

• The proposed spin-off is a significant corporate action that may unlock value for shareholders by allowing the infrastructural materials & services segment to realize its standalone value.
• Depending on the final structure, GKE’s shareholding in GKEH could be materially diluted (by 20% or more), which may affect the company’s consolidated financials and valuation.
• Shareholder approval will be required if the dilution threshold is crossed; details of any extraordinary general meeting will be announced in due course.
• No director or substantial shareholder (beyond ordinary shareholdings and directorships in the company) holds any direct or indirect interest in the proposed spin-off.
• Investors should monitor further announcements for updates on the transaction’s structure, timing, and regulatory process, as these could have a material impact on share price.

Cautionary Statements

• The proposed spin-off and listing are at a preliminary stage and are subject to changes in market conditions and regulatory requirements.
• This announcement is not an invitation or offer to acquire shares or securities. Any offering will be made by way of a prospectus or equivalent document, in compliance with applicable laws.
• Investors should exercise caution in trading GKE shares and consult their professional advisers if in doubt.

Conclusion

The proposed spin-off of GKE Corporation’s infrastructural materials and services business represents a potentially transformative corporate action. If successfully executed, the transaction could unlock value for shareholders, allow for greater operational focus, and provide direct access to capital markets for the spun-off entity. However, the process remains in its early stages and is subject to significant uncertainty. Shareholders should look out for further announcements from GKE Corporation and consider the potential shareholding dilution and strategic implications when evaluating their positions.

Disclaimer: This article is for information only and does not constitute an offer or invitation to acquire or deal in any securities. Investors are advised to read all official announcements and consult professional advisers if in doubt about their actions. The information herein is based on official company disclosures as at the date of the announcement, and may be subject to change.

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