LOSS-MAKING IT and computer parts distributor Achieva plans to change course to become a marina owner and operator after its electronics distribution business bled red ink for four out of the past five years.
It has proposed to buy the ONE°15 Marina Club in Sentosa Cove for about S$20 million from its substantial shareholder, privately held consumer goods and lifestyle group SUTL Global, Achieva chairman Lew Syn Pau told a briefing held at the marina on Monday. It will also buy a yacht chartering firm from SUTL for about S$1 million.
SUTL Global owns a controlling stake of 25.29 per cent in Achieva, a thinly traded stock listed on the Singapore Exchange mainboard.
Achieva will pay SUTL the entire S$21 million sum by issuing about 341.5 million new shares at 6.15 cents apiece, it said in a statement. This is slightly above the company's last traded share price of five cents as at May 5.
Mr Lew said Achieva wants to leave the electronics distribution industry because it was "very competitive", with "a lot of bad debt" and thin margins.
The total purchase price for the marina and yacht chartering business is within the S$20.2-23.4 million range estimated by independent valuer KPMG Corporate Finance as at June 30 last year, Achieva said in a shareholder circular.
Achieva chief executive Arthur Tay, who is also a director at SUTL Global, told the briefing that there was a shortage of superyacht berths in Singapore and Hong Kong, which will likely drive demand for the Sentosa marina's services. The wait time for a berth at ONE°15 has stretched to 18 months, he noted, adding that the marina has about 20 years left on its lease.
The company is seeking shareholder approval for the deal, which is considered an interested party transaction. It has also proposed to rename itself SUTL Enterprise after the deal goes through.