Koh Brothers Eco Engineering files to spin off Oiltek in Catalist listing

Palm tree at plantation in Sumatra, IndonesiaPalm tree at plantation in Sumatra, Indonesia

Correction: An earlier version of this article misspelled the company name in the headline. The company name is Oiltek International.

Koh Brothers Eco Engineering has filed a prospectus seeking a listing on SGX’s Catalist board for its subsidiary Oiltek International, a process technology and renewable energy services provider in the vegetable oils industry.

Malaysia-based Oiltek engineers and builds edible-oil refining plants, and its renewable energy division designs and builds biogas recovery plants for palm-oil mill effluents and multi-feedstock biodiesel plants, the filing said. The company has clients located across 32 countries, the filing said.

The proceeds will be used for working capital to expand business operations by securing more and larger projects, as well as for expanding via investments, mergers and acquisitions, joint ventures and/or strategic alliances, the prospectus said.

The prospectus stated Oiltek wasn’t aware of any person who intended to subscribe for 5 percent or more of the invitation shares, but that may occur during the book-building process.

Oiltek’s prospectus said the directors plan to recommend a dividend payout ratio of at least 40 percent for 2022 and 2023.

For 2020, Oiltek reported profit after income tax of 12.06 million ringgit, up from 8.37 million ringgit a year earlier. Revenue for 2020 came in at 87.54 million ringgit, up from 80.19 million ringgit a year earlier, the filing said.

For the first half of 2021, Oiltek reported profit after tax of 4.35 million ringgit on revenue of 47.22 million ringgit.

Oiltek said its major customers include Ahmed Oil and Ghee Industries, Hap Seng Plantations River Estate, some Indonesian subsidiaries of Wilmar International and subsidiaries of Sarawak Oil Palms.

In addition, Oiltek said its customers included a palm-oil processor and exporter in Indonesia, an East Africa-based manufacturer of various products, including edible oil products, a Bangladeshi refinery oil company and Malaysian subsidiaries of an international food processing group which is involved in manufacturing edible oils.

Oiltek had examined in 2018 a potential listing on Bursa Malaysia, but did not proceed as Koh Brothers Eco Engineering’s continuing sponsor advised the parent company should seek pre-clearance from SGX in compliance with Catalist rules, the prospectus said.

Koh Brothers Eco Engineering is 54.82 percent owned by Koh Brothers Group, 28.75 percent owned by Penta-Ocean Construction, 0.47 percent owned by Koh Keng Siang Francis and 0.24 percent owned by Koh Tek Huat, as of 8 June 2021, according to SGX data.