Jubilee enters MOU to sell electronics unit for indicative US$11m

JUBILEE Industries Holdings has entered a memorandum of understanding (MOU) to sell its fully-owned electronics unit, WE Components, for an indicative consideration of US$11 million, the Catalist-listed company said in a Saturday (Nov 27) bourse filing.

The purchaser is Hangzhou Yu Ye Technology, a distributor of semiconductor products and solutions. The China-based company is set to acquire WE for US$4 million, as well as its inventory, which was valued at US$7 million as of end-September.

The deal will expand Hangzhou Yu Ye's overseas chip agency business through WE's product portfolio. "The proposed disposal reflects the deep value of Jubilee's electronics business unit that we have built over the years," said the company's executive chairman and chief, Terence Tea.

Jubilee is 53.07 per cent-owned by Catalist-listed Accrelist, where Tea is also executive chairman and managing director.

Post-transaction, Jubilee's growth will be driven by its mechanical business unit (MBU). There are new revenue opportunities for the MBU, as customers shift their source of purchase to Asean amid US-China tensions, said Jubilee.

Since acquiring Honfoong Plastic Industries in 2018, the MBU's revenue has more than tripled, from S$8.1 million for FY2018 ended March to S$25.1 million for FY2021.

"We are confident that the long-term prospects of the group's MBU and other investments are positive, and will be able to build sustainable value for shareholders post-transaction," said Tea.

Shares of Jubilee closed at S$0.053 on Friday, up 6 per cent. Accrelist shares were down 6.3 per cent to close at S$0.06.