BM Mobility to gain 60m yuan from sale of legacy business

Singapore

MAINBOARD-LISTED BM Mobility on Saturday said that it expects to recognise a gain of 60 million yuan (S$12 million) from the planned disposal of two wholly-owned subsidiaries in China involved in its legacy business of producing and trading synthetic yarns and foamed materials.

The sale of Zhihe (Fujian) Technology and Ziwo (Fujian) Import & Export Trading will significantly bolster its balance sheet and expedite its return to profitability, which it expects to achieve with its green energy business in Malaysia and China, it said.

Zhihe (Fujian) Technology produces synthetic yarns and fabrics used for making consumer lifestyle products, furniture upholstery and car interior linings. Ziwo (Fujian) Import & Export Trading is a trader of foamed materials, textiles, sports accessories, garments and footwear. Both have been in the red for three consecutive years due to waning demand and stiff competition in China.

As at end-June 2018, the two subsidiaries had a combined negative book value of 57 million yuan. The buyer of the two subsidiaries is Hong Kong Bangwei Investment, an entity owned by an executive of the two subsidiaries' management team.

On a pro forma basis, had the sale been completed at the end of 2017, BM Mobility would have had net tangible assets of 9.48 RMB cents per share compared with negative net tangible assets of 2.52 RMB cents a share before the disposal.

The sale is subject to the approval of shareholders, majority of whom had given their support early this year for BM Mobility's entry into the green energy business. The new business involves operating an electric-vehicle sharing service in Malaysia and providing charging equipment and solutions for electric cars in China.

For the half year ended June 30, 2018, the group narrowed its losses to 7.1 million yuan, from 45.7 million yuan on the back of the consolidation of the green energy business, plus an absence of allowance for impairment loss compared to a year ago.

Revenue also fell 86.1 per cent to 2.7 million yuan, as there was no contribution from the raw materials business which ceased production since the first quarter.

In early August this year, BM Mobility launched the first electric-bicycle sharing service in Malaysia under its own brand, RevgoTM.