Singapore-listed conglomerate UPP Greentech said it is terminating its joint venture agreement that it struck with its Myanmar partner in July.
In a disclosure to the Singapore Exchange, the board of directors of UPP Holdings Ltd announced that UPP Greentech Pte Ltd and Myan Shwe Pyi Ltd (MSPL) have entered into an agreement to terminate their joint venture agreement (JVA) by mutual agreement.
However, the company will still incorporate the JV vehicle.
“Notwithstanding the termination of the JVA, pursuant to the agreement, UPP Greentech and MSPL, have agreed to proceed with the ongoing incorporation of UPP-MSP, which would be the joint venture vehicle for any future investment of the parties in Myanmar,” UPP said in the filing.
In July, UPP Greentech, a subsidiary of UPP Holdings Ltd, inked a joint venture agreement with MSPL to establish a company called Kanaung Engineering Ltd.
Under the agreement, UPP Greentech was supposed to own 67 percent stake in Kanaung, with the remaining 33 percent held by MSPL.
Kanaung Engineering’s main operations were expected to involve the blasting and drilling of rocks and/or breaking down blasted rock materials into aggregates to support key infrastructure projects in Myanmar.
The JV company will have had a total issued and paid up capital of $20,895,523 (S$26.52 million).
UPP said the total issued and paid-up share capital of UPP-MSP will be maintained at its current level of $50,000 comprising 50,000 ordinary shares of $1 each as required by the Companies Registration Office of Myanmar and will not be increased to $12 million divided into 12 million shares of $1.00 each as contemplated in the JVA.
The total issued and paid-up capital of UPP-MSP is held in the following proportions: MSPL, 12,500 shares representing 25 percent of the share capital of UPP-MSP; and UPP Greentech, 37,500 shares representing 75 percent of the share capital of UPP-MSP.
UPP Greentech has two board seats, whereas MSPL has one board seat on UPP-MSP.
UPP said the termination of the JVA and the incorporation of UPP-MSP are not expected to have any material impact on the consolidated net tangible assets per share and earnings per share of the company and its subsidiaries, for the current financial year ending 31 December.