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A-Sonic Aerospace to divest associate company for HK$11.8m

IN line with a plan to divest non-core and non-strategic business units, A-Sonic Aerospace intends to divest its 40 per cent interest in an associate company for a total of HK$11.8 million (S$2.04 million), the company announced on Saturday.

The company to be divested is Silver Express International Limited, a cargo handling firm incorporated in Hong Kong. A-Sonic Aerospace holds 80,000 shares in it through a subsidiary company.

As the aggregate value of the consideration is about 43.4 per cent of A-Sonic Aerospace's market capitalisation, the proposed transaction is considered a major transaction and is subject to shareholder approval at an extraordinary general meeting (EGM) to be convened.

The proceeds will be used to fund A-Sonic Group's working capital and/or to reduce bank borrowings.

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Silver Express International's unaudited net asset value as at June 30 constituted approximately 5.4 per cent of A-Sonic Aerospace's unaudited net asset value, and as such the proposed transaction will not change the risk profile of the group.

Following the proposed transaction, A-Sonic Aerospace will not have any direct or indirect interest in Silver Express International.

Based on the group's FY2018 results and assuming that the transaction had been completed on Dec 31, 2018, the group would expect to realise a surplus of the proceeds over the net book value of US$2.419 million. Net tangible assets per share would increase to 51 US cents from 46.9 US cents before the proposed transaction.

The group will despatch further details of the proposed transaction and EGM to shareholders in due course.

A-Sonic shares last traded at S$0.205 on Thursday.