Broadway unveils disposal deal in response to SGX query on share movement
Singapore
PRECISION components and foam plastics producer Broadway Industrial Group is planning to sell its foam plastics and flow control device businesses for S$150 million.
The group has on Monday entered into a conditional sale and purchase agreement with Broadway Holdings III Ltd, an investment vehicle wholly owned by US private equity firm Platinum Equity.
The group's foam plastics solutions segment is a leading supplier of protective packaging, insulation and component products to various sectors including consumer, IT, cold chain, automotive and lifestyle markets.
Its flow control device business, part of wholly owned subsidiary Compart Asia Pte Ltd, supplies high-precision mechanical parts and assemblies to the semiconductor wafer fabrication industry and other industrial markets.
The disposed businesses have a book value of S$110.1 million as at June 30.
Broadway Industrial Group said it intends to use the proceeds from the sale to repay banking facilities and for working capital as well as dividends.
The group's board said it believes the sale to be an "attractive opportunity" for the firm to monetise its investment in the businesses in light of current market conditions, and that it will unlock value for shareholders.
The announcement came after the Singapore Exchange queried the firm on unusual volume movements in its shares earlier on Monday. The counter surged 23 per cent to 16.6 Singapore cents amid heavy trading in the morning, before the firm called for a trading halt at noon.
Broadway Industrial Group fell into the red for its 2015 financial year, recording a net loss of S$85.9 million against a net profit of S$173,000 in 2014. It had decided to take a S$67.3 million impairment charge on its 44.15 per cent stake in Compart Asia due to continued losses suffered by its hard disk drive division.
Full-year revenue slipped 6.3 per cent to S$650.7 million due to lower contribution from the hard disk drive and foam plastics divisions.
