Hiap Hoe to acquire 14.9% stake in Ley Choon for S$14.5m

Part of company's revenue diversification strategy.

Singapore Exchange Mainboard-listed Hiap Hoe Limited (Hiap Hoe) and Ley Choon Group Holdings Limited (Ley Choon) are pleased to announce that Hiap Hoe, through its wholly-owned investment arm, Hiap Hoe Investment Pte. Ltd., has acquired a 14.9% interest in Ley Choon through a placement of 88,268,000 shares at a placement price of S$0.1642 per share.

The placement price represents a 10.0% discount from the full market trading day’s weighted average price of S$0.1824 per share on 30 July 2013.

Mr Teo Ho Beng, Hiap Hoe’s Executive Chairman and Chief Executive Officer said, “We are pleased with our investment in Ley Choon as it is central to our strategy of growing our investment activities, enlarging and diversifying our revenue streams over the next few years. More importantly, the complementary businesses of Hiap Hoe and Ley Choon present an excellent opportunity for both companies to realise operational synergies and cost efficiencies, which will create value for investors over the longer term. We are indeed proud to be part of a market leader with over 20 years of experience and success.”

“We are delighted to have Hiap Hoe on board as our strategic investor which will strengthen our shareholder base. The investment is an endorsement of Ley Choon’s business strategy, our strong industry position, as well as recognition of the prospects of the growing public infrastructure industry in Singapore and in the region owing to population growth and rapid urbanisation,” said Mr Toh Choo Huat, Executive Chairman and Chief Executive Officer of Ley Choon.

Ley Choon recently commissioned its second asphalt premix plant, the largest in Singapore in terms of production capacity, to cater for its own projects and for sales to other road contractors. The company has also secured a number of contracts in the year including the construction of a flyover bridge in Brunei as well as projects for PUB and LTA in Singapore.

The subscription of Ley Choon shares by Hiap Hoe is expected to be completed on or before 31 August 2013, and will be funded by internal cash and/or bank borrowings.