Company Divests Assets for S$51.4 Million to Strengthen Cash Flow
OKH Global, a property development company, has entered into a conditional agreement to sell its stakes in Equalbase and Deltanvil for S$51.4 million. This transaction exceeds the company’s current market capitalisation of S$28.2 million. Equalbase is a logistics warehouse developer with properties in Singapore and Malaysia, while Deltanvil is a freight-forwarding firm largely owned by Christian Paul Bischoff.
The deal involves OKH Transhub, a subsidiary of OKH Global, selling a 40% stake in Equalbase to Deltanvil. Additionally, another subsidiary, Chronoz Investment, will sell its 15% stake in Deltanvil to Bischoff. Previous attempts to sell these holdings to the same parties in 2017 were unsuccessful, and there have been no other interested third-party buyers since then.
OKH Global will receive S$43.4 million from the sale of Equalbase and S$8 million from Deltanvil, leading to a total divestment of its stakes in both companies. However, the transactions will result in a net loss of S$16.6 million, or 24%, as the book value of the Equalbase and Deltanvil holdings was S$59 million and S$9 million, respectively, as of June 30, 2021.
The decision to divest Equalbase is driven by OKH Global’s inability to fund its expansion. The divestment of Deltanvil is due to challenging market conditions, with its logistics business struggling in recent years. OKH Global aims to improve its cash flow position through these sales, with proceeds directed towards repaying secured shareholder loans totalling S$40.5 million.
Following the announcement, OKH Global’s shares dropped by 4%, closing at S$0.024.
