Developer to take majority stake in Hitchins

Michelle Quah
Sep 21, 2006
The Business Times

SESDAQ-LISTED Hitchins Group says ME Development (MED) - a real-estate
developer in the Middle East - has agreed to take up a majority stake in the company.

The deal is part of a proposed corporate exercise by Hitchins which would
raise more than $19 million for the company.

The corporate exercise comes in four parts. The first involves MED
subscribing for 120 million new Hitchins shares - representing 51.47 per cent of the enlarged capital - for $6 million or five cents a share.

The second is a call option for MED for up to 120 million new shares at the same price.

On completion of the subscription, Hitchins will place out to investors up
to 20 million new shares at five cents each. This will be followed by a 1-for-2 rights issue of up to about 126.5 million shares, again at five cents each.

The subscription shares and the option shares will represent 60.04 per cent of Hitchins' enlarged capital, assuming all rights and placement shares are issued.

The company will be making an application to the Securities Industry Council for a waiver of the obligation by MED and concert parties to make a general offer.

Hitchins, a waterproofing specialist, said the company will later be renamed MED Singapore Limited, or such other name as may be agreed between MED and Hitchins.

Hitchins said this corporate venture would help it capitalise on the booming property development market in the Middle East.

It would also make Hitchins one of the few listed companies to provide a
Singapore-based investment vehicle for local, Middle Eastern and international investors to tap into the growth opportunities offered there, the company said.

'We're excited by the large potential offered through this venture with MED that will strategically strengthen the Hitchins Group's position in the Middle East, adding to our current operations out of Singapore as well as China,' said Hitchins' managing director, Michael Wong.

MED's managing director Oussama Al-Dimashki said Hitchins was vital and
complementary to MED's businesses.

'This venture is an important next step for both companies as it leverages
on strengths to connect the Middle East property industry to a wealth of new products offered by Hitchins,' he said.

MED, headquartered in Dubai, is currently involved in several projects in
the Middle East.