SINGAPORE crane supplier Tat Hong could sell its Australian construction and heavy-equipment arm as it weighs its future Down Under, said group chief executive Roland Ng.

 

The Australian Financial Review (AFR) had reported that the group may seek at least A$800 million (S$714.02 million) for the sale of Tutt Bryant Group (TBG), based on valuations in recent transactions.

 

AFR added that Tat Hong has brought in Bank of America (BofA) to help facilitate the sale. 

 

&ldquo The process is a review of strategic options for (Tat Hong) shareholders,&rdquo Ng told The Business Times on Thursday (May 18).

 

While the company has identified growth areas in Australia, like the equipment rental business, it might need some &ldquo financial muscle&rdquo to grow and compete with larger players, some of whom have revenue in the billions, he said.  

 

If shareholders of Tat Hong opt to sell TBG, proceeds from the sale may be used to re-enter the Australian market, possibly through partnerships with other companies, he added. 

The new developments come months after Bloomberg reported that Tat Hong was at the early stages of deliberating a sale of TBG and was tipped to be seeking more than US$500 million.

 

Tat Hong entered the Australia construction equipment distribution and manufacturing market in 1996 by acquiring the Tutt Bryant Equipment sales division. TBG was listed on the Australian Securities Exchange in 2005, but Tat Hong delisted the entity in 2010 following a compulsory acquisition. 

 

Tat Hong, which used to be listed on the Singapore Exchange&rsquo s mainboard, is one of the largest crane-owning companies in the Asia-Pacific it has more than 1,500 cranes in its fleet. It went private in 2018 following a buyout from Ng and Standard Chartered&rsquo s private equity arm

 

MAINBOARD-LISTED financing firm IFS CapitalIFS Capital: I49 0% could offer leasing solutions with a focus on tower crane financing in China, under a non-binding memorandum of understanding (MOU) inked and disclosed on Monday (Dec 6).

 

The deal with Hong Kong-listed crane provider Tat Hong Equipment Service could see IFS Capital owning a 60 per cent stake in a new joint-venture company that would act as a financier in leasing arrangements.

 

The financier would release funds to the manufacturer, and approved borrowers such as engineering, procurement, and construction contractors would make monthly repayments to the IFS-Tat Hong joint venture.

 

IFS Capital chief executive Randy Sim said in a statement the planned tie-up would " not only allow us to grow our suite of SME (small and medium-sized enterprise) financing solutions but also extend our geographical footprint into China" as a starting point for new opportunities in that market.

 

The IFS Capital board disclosed that director and controlling shareholder Lim Hua Min is deemed interested in about 5.55 per cent of Tat Hong Equipment Service voting shares through shares held by Phillip Capital (HK) Ltd. IFS Capital is part of the Phillip Capital network of companies.

 

Otherwise, no other directors have any interests in the MOU, which is still subject to negotiation and definitive agreements, the board added.

 

Tat Seng Packaging Group will not be going ahead with the proposed spin-off of its China-based subsidiary for a separate listing.

 

&ldquo The company is of the opinion that the current global economic environment, taking into consideration the impact of the global Covid-19 pandemic outbreak, as well as the volatile global equity markets are not conducive for the proposed spin-off and listing,&rdquo says the corrugated paper manufacturer on Aug 12.

 

The proposed spin-off was first mooted in February this year.

On the same day, the company announced that earnings for 1HFY2021 was up 37% y-o-y to $14 million, on the back of a 36.4% increase in revenue to $176 million, thanks to higher volume sold and higher selling prices.

 

The company plans to pay an interim dividend of 1.5 cents per share, up from one cent paid this time last year.

 

Tat Seng shares closed on Aug 13 at 82 cents, up 4.49% for the day and up 33.61% year to date.

 

Separately, Tat Seng&rsquo s controlling shareholder, another listed company Hanwell Holdings, reported revenue of $257.8 million, up 19.5% y-o-y, thanks partly to contributions from Tat Seng. Hanwell owns around two-thirds of Tat Seng.

 

Hanwell, which sells consumer staples such as rich, foodstuffs and tissue paper, saw a slight drop in this business too because of the high base effect over last year&rsquo s spike in demand because of consumers stocking up amid the pandemic.

 

Coupled with unfavourable foreign exchange movements, earnings dropped by 10% to $8.9 million.

 

Hanwell plans to pay an interim dividend of 0.25 cent. It didn&rsquo t pay any this time last year.

 

In April this year, Hanwell had a change in board control after Sam Goi Seng Hui garnered enough support to vote out previous executive director Coco Tang Cheuk Chee.

Group CEO plans to grow its business to capture a larger market share in China

 

TAT Hong Equipment Service (THES), the Chinese-arm of local crane rental company Tat Hong Holdings, on Dec 10 passed the hearing by the Hong Kong Stock Exchange' s (HKSE) Listing Committee for a listing there. It expects to launch its initial public offering before the end of the year, and to commence trading in January.

 

Speaking to The Business Times, Roland Ng, chairman and group chief executive of Tat Hong Holdings, said the decision comes as he believes that the business is better suited for the Chinese market and investors, given that it is a " unique kind of operation in China" . THES is a tower crane service provider.

 

Apart from THES, Tat Hong Holdings also has business arms across the Asean region and Australia. In Asean, it provides crawler crane rental and crane sales in Australia, it provides rental of crawler cranes and general equipment, as well as equipment sales.

 

Tat Hong Holdings, once listed on the Singapore Exchange (SGX), was privatised in 2018 following a takeover bid, where all its shares were successfully acquired by a tie-up between the family of Mr Ng and Standard Chartered' s private equity arm.

 

Mr Ng told BT that since each business arm has its " own market and product" , it made sense to operate the three divisions independently.

 

Delisting the whole group from the SGX provided " better value" , as it allowed him to have the opportunity to list each individual unit in the respective stock exchanges, he added.

 

This means Mr Ng could also be looking at a potential listing in Australia " when the business comes back" .

 

As for his Asean operations, he would consider a potential relisting in Singapore.

 

Following THES' s listing on the HKSE, Mr Ng plans to grow its business to capture a larger market share in China, adding that " there are a lot of opportunities especially on the infrastructure (front)" .

 

Additionally, while not on the cards at the present moment, Mr Ng noted that listing in Hong Kong may also open doors for a secondary listing in China.