You are here
Huan Hsin to sell indirectly owned China subsidiary for 274.4m yuan
HUAN Hsin Holdings plans to sell indirectly owned China subsidiary Shanghai Huan Yi Technology Co for 274.4 million yuan (S$55.8 million) before withholding tax deductions in order to increase working capital and to repay existing debt.
Link JV Holdings, the buyer, is an unrelated party. Link JV will buy all the shares of Ideal Project Consultant, a company with an issued share capital of S$13.6 million and which owns all of Shanghai Huan Yi.
Shanghai Huan Yi, in turn, owns the land use rights to an 80,284 square metre industrial land parcel in Shanghai and the factories on the site. The land use rights last until 2052. DTZ Debenham Tie Leung has independently valued the property at 229 million yuan.
The buyer will deposit 25.5 million yuan in a US dollar escrow account within 10 business days of July 20. The remaining 204.8 million yuan will be paid at closing.
Link JV may also hold back up to 10 per cent of the consideration during the first 12 months for any liabilities that were incurred before the closing date.
Huan Hsin said that Ideal Project Consultant is currently carried at book value of S$12.7 million. For the quarter ended March 2016, the sale assets incurred a net loss of S$526,953.
Huan Hsin is currently on the watch list of the Singapore Exchange for failing to meet profitability requirements. The company has until March 4, 2017, to get itself off the list.