Accrelist to divest stake in Jubilee as part of strategic review; names new director

CATALIST-listed Accrelist plans to divest a 17.5 per cent stake in Jubilee Industries Holdings for S$6.95 million and undertake a capital reduction exercise, in line with its strategic review to focus on its medical aesthetics business, it said on Tuesday.

Accrelist has proposed to dispose of about 44.4 million shares in Catalist-listed Jubilee to EG Industries Berhad, which provides electronic manufacturing services.

Accrelist's executive chairman and managing director, Terence Tea, is also the group executive chairman of EG Industries, which is listed on Bursa Malaysia's second board.

EG Industries holds a 5.21 per cent stake in Accrelist and is a substantial shareholder of the company. The proposed disposal is intended to synergise the business operations of Jubilee and EG Industries, both of which operate within a similar industry, Accrelist said.

The net sale proceeds after deducting expenses is estimated at S$6.8 million, which will give rise to an estimated net loss of S$0.5 million over the S$7.4 million book value of the Jubilee sale shares as at March 31. Part of the proceeds will be used for general working capital, and/or strategic investments when suitable opportunities arise, Accrelist said.

Earlier this week, BT also reported that Jubilee intends to dispose of its 13.8 per cent stake in EG Industries to Mr Tea for S$5.37 million in cash.

In addition, Accrelist has also proposed a capital reduction exercise that will involve a write-off of S$72.4 million in accumulated losses, as well as a distribution in specie of Jubilee shares to Accrelist shareholders.

Accrelist intends to distribute about 122.5 million shares representing an approximate 48.3 per cent stake in Jubilee, on the basis of 0.3855 Jubilee share for each ordinary share in Accrelist. Fractional entitlements will be disregarded, and the Jubilee shares will be distributed for free.

The number of Accrelist shares held by each shareholder will remain the same before and after the proposed capital reduction, the company said.

Upon completion of all the proposed transactions, Accrelist will cease to hold any shareholding interest in Jubilee.

The company's directors are also of the view that writing off the accumulated losses would better present its balance sheet to reflect its underlying assets and financial position.

It added: "The company would be in a better position to retain profits and enhance its ability to pay future dividends if the accumulated losses are written off. The proposed capital reduction and proposed distribution, if effected, would result in the company having a more efficient capital structure and also improve shareholders' return on equity."

Separately, Accrelist has appointed Kang Pang Kiang as a non-executive and non-independent director of the company, effective Dec 24.

Mr Kang is the chief executive of EG Industries. He has also been appointed as a member of Accrelist's audit committee and a member of its remuneration committee. With this appointment, the company's audit committee would meet the requirement to have a minimum of three members.

As at 10.48am on Thursday, Accrelist shares were flat at 7.4 Singapore cents, while Jubilee shares were flat at 10.2 Singapore cents.