Key Highlights of the Announcement

• Entry into Sale and Purchase Agreement (SPA): H2G Green Limited, via its wholly-owned subsidiary P5 Pte. Ltd., has entered a binding SPA with Molteni Singapore Pte. Ltd. (a wholly-owned subsidiary of the Italian design furniture group Molteni Group S.p.A.) for the disposal of specific assets located at the flagship Molteni&C showroom, 3 Killiney Road, Singapore.
• Scope of Disposal: The transaction covers IT assets, inventory, the existing showroom lease, all ongoing design project orders, and pipeline orders. Notably, landlord-owned fixtures, cash, and accounts receivable are excluded.
• Transaction Value and Payment Terms: The agreed consideration totals S\$1,004,945, split in two tranches: S\$116,789.20 (already paid as advance) and S\$888,155.80 (payable by 12 January 2026, subject to lease novation).
• Completion Conditions: The SPA’s completion hinges on due diligence, assignment/novation of contracts, regulatory and corporate approvals, and satisfaction of representations and warranties.
• Employee Secondment: P5’s specified employees will be seconded to Molteni Singapore until 31 March 2026, with costs and an admin fee reimbursed fully by the buyer.
• Ongoing Revenue Streams for P5: P5 will receive commissions on both design project and pipeline orders completed post-closing—20% for design projects and 10% for pipeline orders up to 1 July 2027.
• Commission Rights for Mixed-Use Subcontract: P5 will negotiate a commission structure with Molteni Singapore for any future sales under the Mixed-Use Subcontract, and will be released from related payment obligations if the contract is awarded to the buyer.
• Liquidated Damages Clauses: Notably, breaches of exclusivity or commission payment terms trigger liquidated damages: S\$1,004,945 for P5’s breach, S\$500,000 for Molteni Singapore’s breach.
• P5’s Future Business: After closing, P5 may continue distributing non-Molteni&C branded high-end furniture and kitchen equipment and sell existing Molteni&C stock, but delivery will be timed with showroom renovations.
• Indemnification: P5 will indemnify Molteni Singapore for three years against breaches, pre-closing liabilities, or tax/employment claims.
• Termination Provisions: The SPA can be terminated by mutual consent or if breaches are not cured within five business days. Termination consequences are clearly defined for both parties.

Financial Impact and Shareholder-Relevant Information

• Strategic Rationale: The disposal allows H2G Green Limited to refocus resources on its energy business segment, improve operational efficiency, and sharpen strategic focus—potentially enhancing shareholder value.
• Use of Proceeds: Net proceeds will support general working capital and the Group’s energy business operations.
• Net Tangible Assets (NTA) and Loss per Share (LPS):
  • NTA per share is expected to increase from S\$0.0117 to S\$0.0123 post-disposal.
  • Net loss per share will decrease from S\$0.0026 to S\$0.0020, reflecting improved profitability.
• Gain on Disposal: The transaction will generate an estimated gain of S\$951,173 for H2G Green Limited, based on the net book value of the assets.
• Catalist Rules Assessment: The relative figures under SGX Catalist Rules (net asset, loss, consideration) are all below 5%, classifying this as a non-discloseable transaction—but the announcement is made voluntarily due to its materiality.
• No Change in Directorship: No new directors will be appointed in relation to this transaction.
• No Director/Shareholder Interests: None of the directors, controlling shareholders, or their associates have any direct or indirect interest in the SPA, outside their existing roles.
• Document Inspection: The SPA is available for shareholder inspection at the registered office for three months.

Potentially Price Sensitive Elements for Investors

• Significant Gain Realized: The expected gain of S\$951,173 could positively impact the Group’s upcoming financial results.
• Improved Profitability Metrics: Both NTA per share and LPS show improvement, which may lead to increased investor confidence and potentially support share price appreciation.
• Strategic Refocusing: The shift in focus toward the energy segment, coupled with an exit from the lifestyle/furniture segment, marks a strategic pivot that could influence future valuations and investor perceptions.
• Ongoing Revenue Streams: P5 retains commission rights on orders secured pre-disposal and certain post-disposal orders, providing recurring income even after asset transfer.
• Strong Protective Measures: The SPA contains indemnities and liquidated damages clauses, protecting shareholder interests and providing financial safeguards.

Conclusion

The disposal of P5’s assets to Molteni Singapore Pte. Ltd. is a significant strategic step for H2G Green Limited, offering both immediate financial benefits and long-term strategic advantages. The transaction is expected to improve key financial metrics, provide new working capital, and enable the Company to concentrate on its energy business. Investors should closely monitor subsequent financial results and strategic updates, as these changes may influence share price performance.

Disclaimer

This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell securities. Investors should conduct their own due diligence and consult professional advisors before making investment decisions. The information is based on publicly available disclosures as of the date of the announcement and may be subject to change.

View H2G Green Historical chart here