CONSTRUCTION company Lum Chang is mulling over plans to spin off its interior fit-out business in a listing on the Singapore Exchange’s Catalist board.
Lum Chang Interior (LCI) is a majority-owned indirect subsidiary of the company. Lum Chang’s current aggregate effective shareholding in LCI is 80 per cent, through its wholly owned subsidiary Lum Chang Asia Pacific. The remaining 20 per cent is held by LCI managing director and co-founder Lim Thiam Hooi.
LCI carries out Lum Chang’s interior fit-out business, with expertise in complex interior and retrofitting projects. It also specialises in conservation, restoration, and alteration services across a range of sectors including commercial, retail, food and beverage, and hospitality.
If the spinoff and listing are successful, Lum Chang shareholders may receive shares of the listed entity through a distribution in specie, said the company on Thursday (Nov 21) evening. Any decision on the distribution in specie will be made by the board at a later date.
And while the structure of the proposed spinoff has not yet been finalised, Lum Chang intends to retain at least 51 per cent of shareholding interest in LCI.
The move to have two separate listed companies will help to unlock the potential value of the interior fit-out and renovation business, Lum Chang said. This will also allow the underlying business and assets of the wider group to be better appraised. In turn, this will enable “the value of such businesses and assets to be better reflected”, the company added.
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The spinoff listing may also attract new investors in either the group or LCI who are seeking opportunities in a more focused business model, said Lum Chang. This will create a “wider, deeper and more diverse investor base for the group as a whole”.
LCI has demonstrated “strong growth” in recent years, including its latest financial year ended Jun 30, 2024. The company noted LCI has secured several contracts for interior fit-outs, addition and alteration works, as well as new building erection, with about S$177.8 million in outstanding value of works yet to be reported as revenue.
Lum Chang said that the proposed spinoff is currently at the preliminary stage, and it is in the process of formally appointing an issue manager and legal advisers for the move.
However, even after obtaining the necessary approvals, Lum Chang’s board may still decide against proceeding with the separate listing or the proposed distribution in specie, if it is not in the interest of the company.
Shares of Lum Chang closed flat at S$0.305 on Thursday, before the announcement.
