ST Engineering divests specialty vehicles subsidiary in India

 Singapore Technologies Engineering Ltd (ST Engineering) recently announced that its indirect subsidiary, SDG Kinetics Pte. Ltd. (SDGK) will divest 100% of LeeBoy India Construction Equipment Private Limited (LBI) in two tranches to Polyhose India Private Limited (Polyhose) for a consideration of US$1.05m (about S$1.44m). The consideration was arrived at after taking into account current market conditions, financial position of LBI and future business prospects.

Closing for the first-tranche divestment comprising 73% stake took place on 31 October 2018.  The balance stake of 27% will be transferred to Polyhose upon receipt of acknowledgment for relevant regulatory filings.

 As part of the transaction, ST Engineering Land Systems Ltd., through SDGK, made a capital injection of INR 344m (about S$6.5m) to enable LBI to discharge its outstanding bank loans of the same amount.

 LBI was set up in 2010 to manufacture and distribute road construction equipment in India. The divestment is a result of ST Engineering’s ongoing business review to streamline capabilities and optimise resources within the Group.

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