You are here
Allied Technologies disposes unit for purchase consideration of S$25m
ALLIED Technologies announced after trading hours on Wednesday that it will be disposing its unit Allied Technologies (Suzhou) Co (ATSU) for a total purchase consideration of S$25 million.
The purchaser is businesswoman Hong Siou-Jhu, who is residing in Taiwan, and is intending to expand her business into China via the acquisition, according to a filing to the Singapore Exchange (SGX).
The total sum of S$25 million consists of S$21 million as equity consideration for the proposed disposal, and S$4 million as loan assignment consideration - the amount owed by ATSU to the company.
Allied Technologies said that the proposed disposal "will be beneficial to and is in the best interests of the company and its shareholders" as ATSU is incurring losses to the group since the financial period ended Sep 30, 2017 as a result of allowance made on trade receivables from a particular customer, which are overdue and unlikely to be recovered.
It added that ATSU is also involved in new solar power projects, which have not been progressing according to the planned timeline due to delays caused by weather and in obtaining approval from relevant stakeholders, increasing uncertainty on the outcome of the project.
The group said: "Considering the risk-adjusted cost and benefit analysis, the group is of the view that the proposed disposal will allow the group to redeploy its resources and capital to other profitable operations and eventually deliver positive value to shareholders."
After the proposed disposal, the principal business activities of the group remain unchanged, according to Allied Technologies. They consist mainly of manufacturing of the metal-stamped parts, tools and dies and provision of related design services, sub-assembly of mechanical components, plastic injection moulding, manufacturing of plastic parts and assembly of consumer electronics.
However, in a separate press release, the group said that it is making the first step in the group's plan to diversify its business and invest in the technology and services sector, which will significantly alter the profile of the group's business to a high-growth sector.
This group had signed a binding Memorandum of Understanding (MOU) with 8travelpay Intelligence & Technology (Shanghai) Co to acquire up to 25 per cent stake in the latter for a total consideration of US$10 million.
Separately, it was also announced that the group's executive director and group deputy managing director Soh Weng Kheong has resigned to pursue his personal interests. He previously oversaw the group's strategic investment and corporate planning activities.