ST Kinetics sets up specialty vehicles subsidiary in Brazil

Also acquires manufacturing assets for S$9.2m.

Singapore Technologies Engineering Ltd (ST Engineering) announced that its land systems arm, Singapore Technologies Kinetics Ltd (ST Kinetics) has, through its wholly owned subsidiaries, SDG Kinetics Pte. Ltd. (SDGK) and Autonomous Technology Pte Ltd (ATPL), set up a wholly owned subsidiary, LeeBoy Brazil Equipamentos De Contrução Ltda. (LeeBoyBrazil) in Canoas, Brazil.

The new setup with a paid-up capital of BRL20m (approximately S$10.8m) issued 20 million new shares at BRL1 per share, of which SDGK holds 19,999,999 shares and ATPL holds 1 share. To fund the paid-up capital by SDGK into LeeBoyBrazil, ST Kinetics has increased SDGK’s capital by S$11.3m to S$11.8m.

ST Kinetics said it formed LeeBoy Brazil to establish a manufacturing base in Brazil and further grow the brand presence of its LeeBoyTM brand which makes road construction equipment in Brazil and eventually throughout South America. LeeBoy Brazil will provide ST Kinetics with direct access to opportunities driven by Brazil’s economic growth and the government’s commitment to improve the country’s infrastructure, the firm added.

To kick-start its manufacturing operations in Brazil, LeeBoy Brazil has entered into an asset purchase agreement to acquire the manufacturing assets, intellectual property and relevant manufacturing expertise from Ticel Equipamentos Ltda (Ticel), a Brazilian construction equipment company, for a total purchase consideration of BRL17.1m (approximately S$9.2m). The purchase consideration was arrived at on a willing buyer willing seller basis, after negotiations between the parties, taking into account the fair market value of the assets.

The completion of the proposed acquisition is subject to the satisfactory completion of conditions precedent.

The setting up of LeeBoy Brazil and the acquisition of Ticel’s manufacturing assets are 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.