Broadway Industrial still in talks with buyer for hard disk business

Singapore

BROADWAY Industrial Group is still negotiating with a potential buyer of its hard disk drive business, after receiving a draft binding letter of intent from the potential buyer on Nov 17, it said in a bourse filing late on Sunday.

It was this letter of intent from an undisclosed buyer that led Broadway to halt trading of its shares the next day, on Nov 18.

Having received the binding letter of intent, the mainboard-listed precision manufacturer had been "confident" that an agreement would follow.

It halted trading on Nov 18 morning to prevent any unusual trading activity which might have resulted from any potential leaks of a possible transaction.

But as it turned out, further negotiations with the potential buyer are still required. No binding agreement has been reached yet, Broadway Industrial said on Sunday.

With the company still locked in talks, Broadway Industrial lifted its trading halt for trading to resume on Monday.

The stock rose 0.3 Singapore cent or 2.5 per cent to close at 12.4 cents on Monday, with 14.3 million shares changing hands.

Broadway Industrial said that the binding letter of intent follows on from developments announced on May 28.

It said then that it had entered into a non-binding indicative proposal to dispose of the hard disk drive business by selling its wholly-owned subsidiary BIGL Asia. This drove its shares to surge by 24.5 per cent the next day.

Broadway Industrial did not disclose the interested party's identity, but said the potential buyer intends to retain BIGL Asia's key management and technical staff.

Broadway Industrial had initially planned to execute the sale and purchase agreement by Nov 15 and to complete the sale by Dec 30.

On Sunday, it said that the group's strategic review to diversify and expand its existing business and to unlock shareholders' value remains an ongoing process.