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IN a bid to exit the precision business and focus on real estate, Regal International Group Ltd (RIG) has entered into a sale and purchase agreement for the disposal of its entire interest in wholly owned subsidiary, Hisaka International Holdings Pte Ltd.
The consideration sum will be payable in two tranches: cash payment of S$7 million upon completion of the proposed disposal; and the net proceeds from the sale of the existing industrial property along Sungei Kadut Loop which is valued at S$5.5 million.
"The divestment of our precision business is a strategic move to streamline our business and transform ourselves into a focused builder-developer," said RIG chairman and CEO Dominic Su.
"This will allow us to fully channel our financial resources towards growing and strengthening our property and property-related businesses which offer significant growth prospects."
The group said it has made headway in strengthening its property portfolio not just in Kuching and Negeri Sembilan, but also Bintulu and Sibu.
Its precision business held through Hisaka International has been buffeted by weak market demands and the challenging global economic climate since 2015.
RIG said it is anticipating challenges ahead for the precision business; disposing the subsidiary will allow it to rationalise its resources and sharpen its focus on its property development business.
The total proceeds from the sale of Hisaka International will be used to pay down debt, expand the business under the property division and as general working capital.