Hot stock: Heavy trading in Jubilee after proposal to sell electronics business unit

SHARES of Catalist-listed Jubilee Industries rose as much as 27.9 per cent amid heavy trading on Thursday (Mar 23).

This came after the group said on Wednesday it will sell its remaining 86 per cent stake in its electronics business unit, We Components, for US$15.9 million in cash.

Jubilee executive chairman and chief executive Terence Tea said the company intends to “return the sale proceeds to shareholders in an effective and cost-efficient manner” to the fullest extent permissible under the law.

Following the announcement, Jubilee’s counter reached a high of S$0.078 on Thursday, rising as much as S$0.017 as at 11.44 am. The last time the counter closed near this level was Aug 5, 2014.

By 2.33 pm, Jubilee’s shares were trading 23 per cent or S$0.014 higher at S$0.075, with 43.4 million shares changing hands, making it the second most traded by volume.

In its Wednesday announcement, the group said it entered into a sales and purchase agreement with Hong Kong-incorporated UPC Electronics, which promotes and distributes semiconductor manufacturers’ products and solutions. UPC previously bought a 14 per cent stake in We Components, which distributes integrated electronic components.

Based on pro forma estimates, had the latest disposal and first disposal been completed on Mar 31, 2022, Jubilee’s net tangible assets per share will rise to S$0.183 from S$0.1058. However, loss per share would widen to S$0.0378 from S$0.0153.

The company will require shareholder approval because the proposed disposal is considered a major transaction. If successful, the transaction will allow Jubilee to “re-strategise its financial and capital resources”, it said in a press statement.