SINGAPORE - Tat Hong Holdings said it intends to spin-off its tower crane rental business via a listing of shares in Tat Hong Equipment Service Co on the Taiwan Stock Exchange.
The mainboard-listed company has submitted an application for the proposed listing.
Tat Hong Equipment Service is a 92.7 per cent-owned subsidiary of Tat Hong Equipment (China) in which Tat Hong Holdings has 88.4 per cent interest.
The remaining 11.6 per cent stake is owned by Yongmao Holdings.
Tat Hong Equipment Service is the holding company of several of the group's tower crane rental subsidiaries in China.
For the financial year ended March 31, the consolidated revenue of the Tat Hong Equipment Service group of companies was NT$2.2 billion (S$98.7 million) and its net income was NT$333 million.
Their earnings per share was NT$5.87.
The listing will be subject to approval from the Taiwan Financial Supervisory Commission and the Taiwan Securities and Futures Commission, an application for which will be made after the grant of approvals from the Taiwan Stock Exchange and the Taiwan Central Bank.
Tat Hong Equipment Service has appointed Fubon Securities Co to advise it on the listing, handle related pre-listing matters and act as lead underwriter.
Tat Hong Holdings directors believe that the spin off would provide access to additional source of funding to capitalise on growth opportunities for the capital-intensive tower crane rental business in China as well as increase the overall financial capacity and flexibility of the group to strengthen the growth of its other strategic business units in Asean and Australia and unlock shareholder value.
Tat Hong Holdings envisaged the listing will result in a reduction of 20 per cent or more of its equity interest in Tat Hong Equipment Service.
Under the listing rules, the parent company will convene an extraordinary general meeting to seek the approval from its shareholders.
Tat Hong Holdings controlling shareholders who hold an aggregate interest of some 51.3 per cent support the proposed listing and have given an undertaking to vote in favour of it.