HGH Holdings Ltd. Announces Proposed Disposal of 20% Stake in Premium Concrete Pte. Ltd.

Key Developments

• HGH Holdings Ltd. has entered into a Share Purchase Agreement (SPA) on 19 March 2026 to dispose of a 20% shareholding in its wholly-owned subsidiary, Premium Concrete Pte. Ltd., to Mr Lim Kui Teng for a total cash consideration of S\$2,400,000.
• The transaction values the 200,000 shares (out of 1,000,000 issued shares) at S\$12 per share.
• Mr Lim is the founder of Chuan Lim Construction Pte. Ltd., a key player in the construction and engineering sector in Singapore.

Details on Premium Concrete Pte. Ltd.

• Premium Concrete is engaged in the supply and manufacturing of ready-mix concrete, precast components, and related products.
• As of 31 December 2025, Premium Concrete reported net liabilities of approximately S\$3.45 million and net tangible liabilities of S\$3.49 million based on unaudited accounts.
• An independent valuation by Baker Tilly Consultancy (Singapore) Pte. Ltd. placed the market value of 100% of Premium Concrete’s equity between S\$12.06 million and S\$12.47 million as of 31 July 2025.
• The transaction does not result in HGH Holdings losing control over Premium Concrete and will be treated as an equity transaction (no gain or loss recognized in the Group’s accounts).

Strategic Rationale and Synergies

• The proposed disposal is seen as a strategic move to strengthen HGH’s partnership with Chuan Lim Construction, which is both a customer and supplier to Premium Concrete.
• Expected operational and commercial synergies include:
  • Continued truck maintenance and repair services,
  • Ongoing supply of raw materials and sludge collection,
  • Secured concrete supply to Chuan Lim’s construction projects,
  • Access to Chuan Lim’s network in earthwork, building, infrastructure, property development, and dormitory sectors.

Salient Transaction Terms

• The S\$2.4 million consideration is payable in cash on completion, after arms’ length negotiations and reference to the independent valuation.
• A key condition precedent is the consent of United Overseas Bank Limited due to banking covenants linked to Premium Concrete’s facilities.
• Completion of the sale is expected within 14 business days from the SPA date, or another mutually agreed date.
• A loan waiver of approximately S\$6.26 million (owed by Premium Concrete to HGH Holdings) will be executed at completion, a significant related party transaction.
• A new shareholders’ agreement between HGH Holdings and Mr Lim will be entered into upon completion.

Use of Proceeds and Financial Impact

• Net proceeds of S\$2.4 million will be used for general working capital purposes.
• Net Tangible Assets (NTA) per share are expected to increase from 2.88 SGD cents to 3.04 SGD cents post-transaction.
• Earnings per Share (EPS) will decrease slightly from 0.29 SGD cents to 0.27 SGD cents due to the reduced profit contribution from Premium Concrete.

Regulatory and Shareholder Implications

• Based on SGX Catalist Rules, the transaction is a “disclosable transaction” (relative figures for size test range from 6.5% to 28.6%) and does not require shareholder approval as no threshold exceeds 50%.
• No new director appointments or service contracts are associated with this transaction.
• None of the directors or controlling shareholders of HGH Holdings has any interest in the transaction beyond their respective shareholdings.

Potential Price-Sensitive Aspects for Shareholders

• The transaction may be seen positively given the strengthening of strategic alliances and new business opportunities, as well as the immediate cash inflow and improved NTA per share.
• However, the loan waiver of S\$6.26 million is significant and could be viewed as a write-off, impacting the Group’s balance sheet in the short term.
• The slight dilution of EPS and the company’s continued exposure to Premium Concrete’s negative equity position are items to monitor.
• The completion of the deal is subject to bank consent, which introduces some execution risk.
• Shareholders are advised to note the transaction’s potential impact on future profits and the company’s strategic positioning within the construction supply chain.

Availability of Documents and Next Steps

• The SPA and valuation report are available for inspection at HGH Holdings’ registered office for three months from the announcement date.
• The company will provide further updates as material developments arise.

Disclaimer

The above article is for informational purposes only and should not be construed as financial advice. Investors should consult their stockbrokers, bank managers, solicitors, or other professional advisers if they have any doubts about their investment decisions. The proposed transaction is subject to conditions precedent and may not be completed. HGH Holdings Ltd. and the Singapore Exchange Securities Trading Limited assume no responsibility for the contents of this article.

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