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Lorenzo subsidiary lines 19m yuan sale of Kunshan unit
LORENZO International said after trading closed on Tuesday its indirect wholly owned subsidiary, Supreme Furnishing Centre Pte Ltd, has received a deposit towards the sale of a business unit at a consideration of 19 million yuan (S$3.87 million).
Supreme Furnishing Centre on Monday received the deposit of five million yuan from Kunshan Gao Er Garment Co in exchange for an option for the latter to acquire Supreme Furniture (Kunshan) Co.
Supreme Furniture (Kunshan) owns land and factory situated at 61 Shengxi Road, Kunshan Economic Development Zone, Jiangsu province.
The parties involved intend to follow up with a definitive sale and purchase agreement.
Lorenzo said proceeds from the sale of the Kunshan business unit will be used to fund its working capital needs.
On a pro-forma basis, the sale is expected to lower Lorenzo's net gearing to 0.7 times and lift its earnings per share for FY15 to 6.18 Singapore cents.