Ho Hup inject more capital

PETALING JAYA: Ho Hup Construction Company Bhd has entered into a shareholders' agreement (SHA) with Kiara Komposit Sdn Bhd and Daiman Kapital Sdn Bhd, to contribute further capital to their joint entity H2Advance Builders Sdn Bhd, formerly known as Nippon Awantech Sdn Bhd.
"This is in line with the strategy of Ho Hup group to expand its participation and to build a stronger footing in the construction and property development industry," it told Bursa Malaysia last Friday.
Under the SHA, the parties have agreed to contribute further capital into H2Advance as a shareholders' advance, based on their holdings in the company, with the advances to be converted into shares following the full contribution of the parties.
"The cost of equity participation by Ho Hup will be satisfied in cash from internally generated funds," said Ho Hup in a filing with the exchange.
As at March 13, Ho Hup holds 60,000 shares or 60% stake in H2Advance, while Kiara Komposit and Daiman Kapital each holds 20,000 shares or 20% equity interest in the company.
Post-share conversion, Ho Hup will own 600,000 shares, representing a 60% stake in H2Advance, while Kiara Komposit and Daiman Kapital will hold 200,000 shares each, or 20% stake.
Ho Hup will also nominate three directors for H2Advance, while Kiara Komposit and Daiman Kapital will nominate one director each.
"The SHA is not expected to have a material impact on the earnings of Ho Hup Group for the financial year ending 31 December 2015. The SHA is expected to contribute positively to the future earnings of Ho Hup Group," Ho Hup said.