Key Transaction Overview
GS Holdings Limited (“GS Holdings” or the “Company”) has announced its intention to divest its entire stake in its wholly-owned subsidiary, Hawkerway Pte. Ltd., to Wei Global Pte. Ltd. (“Buyer”) for a net cash consideration of S\$0.65 million. The deal is structured through a conditional Share Sale and Purchase Agreement (“SPA”), and upon completion, GS Holdings will exit the business of developing and managing food and beverage brands, concepts, and franchises currently operated under Hawkerway. This marks a significant strategic shift for the Company as it refocuses resources on its core F&B Distribution business.
Details of the Disposal
- Sale Structure: GS Holdings will sell 100% of Hawkerway’s shares for a gross consideration of S\$2.6 million, payable in two tranches:
- S\$260,000 (10%) upon execution of the SPA.
- S\$2,340,000 upon completion.
- Net Consideration: After settling up to S\$1.95 million of Hawkerway’s and its subsidiaries’ liabilities post-completion, the net proceeds to GS Holdings will be S\$0.65 million.
- Valuation: Independent valuation by Chay Corporate Advisory Pte. Ltd. values Hawkerway between S\$373,799 and S\$488,744 as at 30 September 2025, indicating the gross sale price is significantly above the valuation range.
- Financial Performance of Hawkerway:
- Revenue for FY2024: S\$9.24 million (declining in recent years).
- Net profit/(loss) before tax for FY2024: -S\$195,000 (loss-making trend).
- Consolidated net liability value as of 30 June 2025: S\$851,000.
- Buyer Profile: Wei Global Pte. Ltd. is an associate of controlling shareholders Mr. Pang Pok and Ms. Ang Siew Kiock, and operates food courts, coffee shops, and canteens.
Shareholder Approval & Regulatory Implications
- Interested Person Transaction: As the Buyer is an associate of two controlling shareholders, the disposal is classified as an “interested person transaction” under SGX Catalist Rule 9. The transaction value (S\$0.65 million) represents 13.8% of the Group’s latest audited net tangible assets (NTA) and thus requires approval from independent shareholders at an Extraordinary General Meeting (EGM).
- Disclosable Transaction: Under Rule 1006 of the Catalist Rules, the disposal constitutes a “disclosable transaction” due to the size and financial effect, but not a “major transaction” as none of the relative figures exceeds 50%.
- Abstention from Voting: The Buyer and its associates (including the two controlling shareholders) must abstain from voting on the resolution to approve the disposal.
- Independent Advice: The Audit Committee and independent directors will seek advice from an Independent Financial Adviser (IFA), with findings and recommendations to be included in the shareholder circular.
- Shareholder Meeting: An EGM will be convened to seek shareholder approval.
Material Terms and Conditions
- Completion timeline: The SPA stipulates completion within six months, subject to various conditions precedent (e.g., board and shareholder approvals, regulatory consents, satisfactory IFA report).
- Post-completion obligations:
- GS Holdings to settle up to S\$1.95 million of Hawkerway and its subsidiaries’ liabilities (including S\$0.47 million intra-group and S\$0.96 million bank loans).
- Any remaining liabilities after this settlement will be borne by Hawkerway, its subsidiaries, and/or the Buyer.
- Buyer to provide new guarantees to discharge existing guarantees in respect of Hawkerway’s debts within 14 days of completion.
Financial Effects and Use of Proceeds
Potential Price-Sensitive and Investor-Relevant Issues
- Strategic Refocus: GS Holdings is divesting a loss-making subsidiary and repositioning toward its F&B Distribution business, which may have a positive impact on its future earnings and share price.
- Improvement in Key Financial Metrics: The disposal is expected to materially strengthen the Group’s balance sheet and reduce losses, potentially supporting share price appreciation.
- Related Party Transaction: As the Buyer is linked to controlling shareholders, investors should note the required independent review and voting exclusions.
- Completion Risks: Completion is subject to multiple conditions precedent, and there is no certainty the deal will complete; shareholders should monitor developments closely.
- Valuation Premium: The gross sale price is substantially above the independent valuation, which may signal strong demand for Hawkerway’s assets or strategic value to the Buyer.
Next Steps and Shareholder Guidance
- EGM to be convened for approval. Further details and recommendations will be provided in the upcoming shareholder circular.
- SPA and related documents are available for inspection at the Company’s registered office for three months.
- Further announcements will be made as material developments occur.
Important Caution
Shareholders should note that completion of the disposal is subject to several key conditions precedent. There is no certainty the transaction will be completed as proposed, nor that there will be no changes to the terms. Investors are advised to exercise caution when dealing in GS Holdings shares and consult their professional advisers as necessary.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. It is based on publicly released information from GS Holdings Limited. Investors should conduct their own due diligence and seek independent financial advice before making any investment decisions.
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