UOB buys 28.66% stake in Hoe Leong for $18.52m

The spare parts distributor is going through financial restructuring.

UOB has bought a 28.66% interest, comprising 1.61 million shares in heavy spare parts distributor Hoe Leong Corporation Ltd (HLC) pursuant to a scheme of arrangement.

According to an announcement, the shares were allotted to UOB for 1.15 cents each or the aggregate price of $18.52m. 

Following the acquisition, HLC will become an associated company of the Bank. 

According to announcements made in April, HLC has entered a restructuring plan in order to rearrange debts and rebuild its financial position. On 9 May, HLC issued 4.99 billion new shares as free float, thereby reducing the public's stake from the allowed 10% to 7.33%.

HLC CEO Kuah Geok Lin said, "The company is currently exploring with the scheme creditors on the possible steps to take and options available to increase the percentage of shares held in public hands to at least 10%."