UNIONMET (SINGAPORE) LIMITED - FinanzNachrichten.de

UNIONMET (SINGAPORE) LIMITED
(Incorporated in the Republic of Singapore)
(Company Registration No.200409104W)
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THE PROPOSED DIVERSIFICATION OF BUSINESS TO INCLUDE (A) PROPERTY
DEVELOPMENT; AND (B) THE BLENDING AND DISTRIBUTION OF DIESEL AND ENGINE OIL
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1. INTRODUCTION
The Board of Directors (the “Board”) of Unionmet (Singapore) Limited (the “Company” and
together with its subsidiaries, the “Group”) wishes to announce that the Company is
proposing to diversify (“Proposed Diversification”) into the business of (a) property
development (“Property Development Business”); and (b) the blending and distribution of
diesel and engine oil (“Oil Blending Business” and together with the Property Development
Business the “Proposed New Businesses”).
2. THE PROPOSED DIVERSIFICATION
As part of the Group’s continuing corporate strategy to provide shareholders with diversified
returns and long term growth, the Group intends to diversify its business to include (a) the
Property Development Business, which will include the business of property holding,
development, management and other related property activities with a focus on the residential
and commercial sectors in Singapore and the People’s Republic of China (“PRC”); and (b) the
Oil Blending Business. If approved by shareholders of the Company (“Shareholders”), the
Group intends to undertake the following activities as and when suitable opportunities arise:-
(a)
Property Development Business
(i)
(ii)
(iii)
(iv)
(v)
undertaking property development activities;
acquiring and holding investments in properties;
property management;
trading in properties with reasonable yield and/or capital growth potential; and
investing, acquiring or disposing of, or trading from time to time in shares
and/or interests in any entity that is in the business of property development,
investment and/or trading.
(b)
Oil Blending Business
(i)
(ii)
(iii)
acquiring and building production and storage facilities in Singapore and the
PRC;
acquiring and purchasing machinery and equipment for the Oil Blending
Business; and
blending, producing, marketing, as well as sale and distribution of blended
diesel and engine oil.

3. RATIONALE FOR THE PROPOSED DIVERSIFICATION
The Group is undergoing a period of review of its current businesses and operations and the
Proposed Diversification is part of the Group’s continuing corporate strategy to provide
Shareholders with diversified returns and long term growth.
Changes in the smelting industry in the PRC
Currently, the existing core business of the Group is based in the PRC. In recent times, the
PRC government has made efforts towards consolidating the smelting industry and reducing
the number of smelters with annual production capacity below certain thresholds. The
business and operations of the Group may be affected by such efforts by the PRC
government and any legislative or regulatory changes in the PRC in future.
In addition, the existing business of the Group remains challenging and has not been able to
provide adequate returns for the Group over the last few years.
With this in mind, the Board is of the view that the Proposed Diversification is in the best
interests of the Group to broaden its sources of revenue and to increase the Group’s
competitiveness.
Potential in property development
The Directors note that though there may be some uncertainty over the direction of the
Singapore property market in the short term, over the mid to long term, the growth and
continued prospects of the Singapore residential property market should remain upbeat. This
is due to the continued demand for housing from residents as well as Singapore’s position as
an attractive real estate market for investment in Asia for both for local and international
investors.
The Directors also note that the PRC has enjoyed rapid economic development in the past
decade. This has led to an increase in its GDP per capita, and per capita disposable income.
There is also increasing urbanization in the PRC, and rapid growth of its cities and
metropolises. Accordingly, the Directors are of the view that all this will lead to increased
demand for housing by urban residents, and encourage individual and corporate investment
in property.
Potential in blending and distribution of diesel and engine oil
Diesel and engine oil is one of the most efficient fuels available today and is used in a variety
of industries including shipping, railroad, motor vehicles and aviation. The Company is
currently in the final stages of negotiations with a manufacturer of oil blending equipment with
the technology to refine and blend diesel and engine oil that will produce potential cost
savings when compared to regular diesel and engine oil.
By harnessing the technology to produce diesel and engine oil that burns in a more efficient
manner, the Board is of the view that the Oil Blending Business represents an attractive
opportunity for the Group as customers seek out more energy-efficient fuel in light of high oil
prices.
The Board believes that this new business has the potential to become a new driver of
earnings growth that will bring economic benefits to the Group in addition to the Group’s core
business and enhance long term shareholder value. The Board believes that the Oil Blending
Business is likely to generate steady cash flows for the Group.
During the initial phases, the Group intends to focus on construction companies as the initial
target customers of its Oil Blending Business in view of the fact that there will be oil
consumption from machinery at construction sites and transportation of building materials.
Accordingly, the Oil Blending Business is likely to be complementary to the Property

Development Business and potentially enable the Group to achieve synergy in these two
businesses.
In view of the foregoing considerations, the Board is of the view that the Proposed
Diversification is in the best interests of the Group to broaden its sources of revenue and to
increase its competitiveness.
4. EXTRAORDINARY GENERAL MEETING (THE “EGM”)
The Proposed New Businesses involve new business areas which are substantially different
from the Group’s existing core business. The Proposed New Businesses may in future form
part of the core business of the Group, and it is envisaged that the Proposed New Businesses
will change the existing risk profile of the Group.
Accordingly, an EGM will be convened by the Company to seek Shareholders’ approval to
approve the Proposed New Businesses, notice of which will be announced in due course.
The EGM will allow the Shareholders the opportunity to communicate their views on the
Proposed New Businesses, and consider, if thought fit, to approve the Proposed New
Businesses. A circular in relation to the details of the Proposed New Businesses, together
with a notice of the EGM to be convened, will be dispatched to Shareholders in due course.
BY ORDER OF THE BOARD
Li Hua
Executive Chairman and Chief Executive Officer
11 January 2014