Ellipsiz sells probe card business for S$88.3m

Singapore

IN A move that will significantly boost its cash reserves, mainboard-listed probe card company Ellipsiz announced on Monday the sale of its probe card business to a Japanese buyer for some S$88.3 million.

The proposed sale of of SV Probe will increase the company's cash hoard to over S$130 million - a figure that is larger than its current market cap of S$111.14 million, raising the possibility of acquisitions and special payouts to shareholders.

This comes as the company also announced a 6.5 Singapore cent dividend payout after reporting a net profit of S$8.5 million for its financial year ended June 30 (FY2017).

By way of the proposed disposal, Ellipsiz will sell 29.3 million shares, which represent 100 per cent of its probe card subsidiary, SV Probe, on a cash-free, debt-free basis.

The purchaser, Nidec-Read, is a manufacturer of measuring and inspection equipment, and a wholly-owned unit of Nidec Corporation, a Japan-based maker of motors and electronic control systems.

Ellipsiz said that it expects to realise an attributable net disposal gain of S$9.9 million, and an excess of the net proceeds over the sale shares' book value of about S$17.8 million.

Kelvin Lum, executive director of Ellipsiz, told The Business Times that the sale will significantly boost Ellipsiz's cash holdings, which currently stand at some S$53 million.

"This US$65 million sale will boost the cash hoard to some S$135 million when the deal is completed. This will fuel Ellipsiz's growth and expansion into new businesses. It also opens up the opportunity to unlock more shareholder value in time to come."

Mr Lum is also a director of Bevrian, the controlling shareholder of Ellipsiz, and the investment holding company of David Lum and family. The latter controls and owns listed development and construction company, Lum Chang Holdings.

Last year, Bevrian made a general offer for Ellipsiz at 0.38 Singapore cent apiece, following which it owns 59.53 per cent of the company.

BT understands that Bevrian has given an undertaking to vote in favour of the sale of SV Probe at Ellipsiz's upcoming annual general meeting.

On Monday, Ellipsiz posted an 11 per cent fall in net profit from S$9.6 million a year ago to S$8.5 million for FY2017 - after recording a provision of S$1.5 million on a financial asset and incurring additional professional fee expenses of S$0.2 million to manage a mandatory cash offer exercise.

It said that the impact of these one-time expenses was partially offset by a gain on the liquidation of units that amounted to S$0.2 million, a gain on the disposal of an associate of S$0.6 million (net of related tax), and a compensation income of S$0.4 million from an insurance claim.

Revenue for the year decreased 2 per cent year on year to S$116.7 million, on lower contributions from both the company's probe card solutions and distribution & services solution businesses.

Earnings per share for FY2017 came up to 5.09 Singapore cents, compared with 5.74 cents a year ago.

The company said in its earnings report: "The group remains cautiously optimistic of our business and financial prospects across key markets and we will continue to be vigilant of our operating environment."

On Monday, Ellipsiz requested to lift the trading halt of its shares. Its counter last traded at S$0.665 on Friday.