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IN just a year after its purchase of wholly owned subsidiary Wan Dormitory, Catalist-listed Oriental Group has entered into an agreement to dispose all of its shareholding in it for S$24.2 million.
The decision was made to alleviate Oriental Group's financial woes, it said in a release after trading closed on Friday.
Thegroup's board is of the view that "the proposed disposal is in the best interests of the group and necessary to address and alleviate the group's cash flow and going concern issues," said the release.
Oriental Group said that it has entered into a sale and purchase agreement with Dacai Pte Ltd that is involved in the agriculture business.
The total consideration for the sale shares will be S$24.2 million. It was arrived at after arms' length negotiations between Oriental Group and Dacai on a willing-buyer willing-seller basis, said the release. As at Oct 28, one per cent of this consideration has already been paid by Dacai to Oriental Group.
Trading in the shares of Oriental Group has been halted on March 8 and thereafter suspended since March 11. This was because the board "was unable to reasonably assess whether the group is able to continue as a going concern due to the lack of assurance on the group's ability to refinance its debt obligations or to raise funds to address its negative working capital."