ST Kinetics to divest 50% equity stake in BZK for S$3.28m

But will still co-own intellectual property.

Singapore Technologies Engineering Ltd (ST Engineering) announced that its land systems arm, Singapore Technologies Kinetics Ltd (ST Kinetics), has entered into a sale and purchase agreement (SPA) with joint venture partner Beijing Jingcheng Heavy Industry Co., Ltd. (JCHIC) to divest its entire 50% equity stake in Beijing Zhonghuan Kinetics Heavy Vehicles Co., Ltd. (BZK) to JCHIC for a cash consideration of S$3.28m.

As part of the SPA, ST Kinetics and JCHIC will co-own BZK’s existing products’ intellectual property.

The consideration for the divestment was arrived at on a willing buyer, willing seller basis, taking into account the general market conditions, BZK’s net assets value and its projected financial performance. The divestment is part of ST Kinetics’ continuous review to streamline its portfolio of businesses.

Along with the SPA, ST Kinetics has signed a Distribution Agreement with BZK for ST Kinetics to continue to distribute and provide aftersales support for BZK’s off road trucks globally under TRXBUILD™, its global brand for the specialty vehicles and services business.

The completion of the divestment is subject to several conditions precedent, including but not limited to the approval of relevant governmental or regulatory authorities.

This divestment is not expected to have any material impact on the consolidated net tangible assets per share and earnings per share of ST Engineering for the current financial year.