Mencast subsidiary in agreement to sell stake in Changshu Honghua Equipment for 49m yuan

A WHOLLY-OWNED subsidiary of Mencast Holdings has entered an agreement to dispose of its entire stake in Changshu Honghua Equipment for 49 million yuan (S$10.3 million), Mencast said on Friday.

The subsidiary - S&W Pte Ltd - had entered into the sale with an unnamed company incorporated in China on a willing buyer willing seller basis.

As part of the agreement, nine million yuan will be paid as a non-refundable deposit at the signing of the agreement while the balance (40 million yuan) will be paid on the completion of the proposed disposal, Mencast said in a filing with the Singapore Exchange.

The group is expected to record a net gain approximately S$1.84 million from the disposal with the completion of the sale expected to take place within six months from date of agreement.

As of Dec 31, 2017, Changshu has no operations and is inactive.

It was previously principally engaged in the business of manufacturing and processing of mechanical equipment, integrated equipment and parts of such equipment (mainly heat exchangers), Mencast said.

Upon the completion of the proposed disposal, Changshu will cease to be an indirect subsidiary of Mencast.

Mencast shares closed S$0.016 or 19.3 per cent higher at S$0.099 on Friday before the announcement.