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Cheung Woh sells entire stake in Jiangsu Tysan Precision, exits China car market
CHEUNG Woh Technologies, a manufacturer of precision components in hard drives, said on Monday it has entered into two sale and purchase agreements to offload its entire 31.34 per cent stake in Jiangsu Tysan Precision Engineering to Chinese companies Changshushi Zhongjin Industrial Investment Co Ltd and Changshushi Xuhong Trading Co Ltd in a deal worth 68 million yuan (S$13.95 million).
In a filing to the Singapore Exchange, Cheung Woh said that it will sell 15.34 per cent of its stake in Tysan Precision to Changshushi Zhongjin, with the remaining 16 per cent going to Changshushi Xuhong.
Changshushi Xuhong will own 16 per cent of Tysan Precision after the deal closes, and Changshushi Zhongjin will see its stake rise to 76.79 per cent from 61.45 per cent.
The amount took into account Tysan Precision's net asset value as at July 31, and a dividend declared in August 2017.
Tysan Precision is incorporated in China with a registered share capital of 180 million yuan, with its principal business being the manufacture of seat recliners and seat tract adjusters.
Cheung Woh is exiting the Chinese car industry amid increasing competition, and the disposal will enable the company to "realise cash and unlock the value in the company's investment".
Cheung Woh's shares last closed at 18.5 Singapore cents on Nov 9.