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K1 sells interest in Guggenheim Capital, to suspend trading on completion as it mulls options
K1 Ventures has agreed to sell off its entire interest in Guggenheim Capital for a gross cash consideration of US$221 million (S$300.4 million) , which will boost its earnings per share by about 31 Singapore cents for the financial year ending June 30, 2017.
The book value, or the value of the asset entered in K1 Ventures' books, is about S$143 million.
KI, in which Temasek Holdings has a deemed interest of 36.04 per cent, had on numerous occasions during the past several years, told shareholders of its intention to divest its interest and distribute the surplus cash back. The disposal is expected to be completed during the fourth quarter of 2017.
The Singapore-listed company will rid 100,000 Series A preferred units, 250,000 common units, 11.11 million detachable warrants, and an additional 1.85 million common units.
"The Guggenheim Disposal is in accordance with the original investment documents,'' K1 said on Friday, adding that it is also part of the company's on-going process of monetising its investments.
The sale is also expected to boost K1's net tangible assets per share by 29 Singapore cents for the financial year ended June 30, 2017, after taking into consideration estimated adjustments for factors such as net assets and income taxes.
On June 13, 2011, K1 completed a US$100 million investment in Guggenheim, which is a US-based privately held financial services firm with more than US$200 billion in assets under management, receiving the preferred units, the common units, and the warrants.
Following the completion of the disposal, K1 Ventures would have disposed of all or substantially all of its assets and property. It would take steps to suspend the trading of its shares from the date of completion of the sale.
After distributing its excess cash to its shareholders, K1 plans to commence voluntary liquidation. However, it will also consider other options including voluntary delisting or reverse takeover of the company, amongst others which are consistent with its stated objective of monetization of investments and distribution of excess cash.
At 09:59am, K1 was trading around S$0.730 a share, up S$0.045, or almost 7 per cent.