Tue, May 26, 2020 – 8:21 PM
CATALIST-listed DLF Holdings on Tuesday announced after trading hours that it is convening an extraordinary general meeting (EGM) to seek shareholders’ approval for its plan to diversify into a new business area that will alter its existing risk profile.
The existing core business of the group is the provision of mechanical and electrical services and solutions, but the group intends to expand into blockchain agency and related businesses.
To reflect this shift, it intends to change its name to “OIO Holdings Limited” to highlight its new focus on blockchain.
DLF said that part of the rationale behind the proposed diversification is to reduce the group’s reliance on its existing business and to provide it with new revenue streams and improve its prospects.
The group said in a filing that it is optimistic about the demand of blockchain-related products and services in Singapore and that this move would enable it to participate in the growth prospects of the blockchain industry.
It is also expected to be complementary to its existing business, enabling the group to access new business opportunities in the market for blockchain-based payments and project-management tools for the construction industry.
“Blockchain-based payment mechanism provides for a timely, transparent and accountable payment system of fees among developers, contractors and sub-contractors, which has been a recurring challenge faced by the construction industry,” said DLF.
Blockchain-based project management tools also enhance the efficiency of the main contractors by allowing them to better plan and monitor their sub-contractors’ tasks via a transparent ledger enabled by blockchain technology and ensure a smooth completion of the construction project, added the group.
Under the proposed diversification, the company intends to enter into a restructuring exercise with its wholly-owned subsidiary DLF Engineering to transfer all the company’s direct equity interests in each of ACMES-Kings Corporation, DLF and DLF Prosper Venture to DLF Engineering.
DLF Holdings will then novate the blockchain agency agreements to another wholly owned subsidiary, known as “OIO Singapore Private Limited”, to be incorporated after the EGM, to carry out the blockchain agency and related business of the group.
The proposed internal restructuring will enable the group to organise its existing business and the blockchain agency and related business separately into different subsidiaries of the company.
This will be funded through internal resources and is not expected to have a material impact on the earnings per share or net tangible assets per share of the group for the current financial year ending Dec 31.