Axcelasia Inc to sell off key Malaysian unit to HK's Tricor Group

CATALIST-LISTED professional services firm Axcelasia Inc is moving to sell off its Malaysian operating subsidiary Axcelasia Taxand to Hong Kong's Tricor Group for RM69.7 million (S$23.4 million), under a sale-and-purchase agreement inked and disclosed on Tuesday.

The transaction would leave Axcelasia with just the holding company, subsidiaries Axcelasia Singapore, Axcelasia Lao and Axcelasia Vietnam, and Audex Governance in Malaysia, which the board acknowledged have not contributed significantly to the group's revenue in the past.

Under the agreement, the group must stop using the name "Axcelasia" by June 30, 2020, although its Laos and Vietnam units have a longer deadline - until three months after the sale goes through - to do so. There is also a non-competition clause for the Malaysian market.

The board said that "it is considering various options available to the company after completion" of the sale, and will update its shareholders "in due course".

Axcelasia is also looking into distributing the proceeds from the planned sale as a dividend, although only after it assesses the company's cash flow needs and future plans, it added, while stressing that there has been no decision on the amount and timing of distribution. The company expects a gain of RM64.9 million from the sale.

But, as the planned sale constitutes a major transaction under Catalist rules, with the net asset value of the sale companies making up 49 per cent of the group's net asset value, Axcelasia will have to put together an extraordinary general meeting to get shareholders' green light for the deal.