ST Engineering land systems arm injects $16m capital into subsidiaries

Meant to fund new JHK plant.

Singapore Technologies Engineering Ltd (ST Engineering) announced that Singapore Commuter Private Limited (SCPL), a wholly owned subsidiary of its land systems arm, Singapore Technologies Kinetics Ltd (ST Kinetics), has injected US$16m (about S$20.34m), through a cash injection of US$1.35m (about S$1.72m) and a conversion of US$14.65m (about S$18.62m) in loans, into the capital of Jiangsu Huatong Kinetics Co., Ltd. (JHK).

The capital injection is SCPL’s second progressive proportionate capital contribution to the US$28.76m (about S$37.06m) investment in JHK, announced earlier on 3 July 2012. This is to fund the construction of JHK’s new plant, as part of its planned relocation and expansion of current production capacity. SCPL will inject the remaining capital of US$6.10m (about S$7.76m) as needed for the new plant, which is scheduled for completion by end 2014. SCPL’s shareholding in JHK remains unchanged at 75.3% after the capital injection.

To fund SCPL’s capital injection into JHK, ST Kinetics has injected S$19.54m into the capital of SCPL, through a cash injection of S$1.54m and conversion of S$18m in loans into equity.

The injection of capital into SCPL for corresponding injection into JHK is 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.

JHK, a joint venture between ST Kinetics and Jiangsu Huatong Machinery Co., Ltd., manufactures Asphalt Pavers, Milling Machines, Motor Graders and Asphalt Batching Plants.

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