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Metech International selling Malaysian e-waste business to general manager
CATALIST-LISTED Metech International is selling its Malaysian electronic waste management (EWM) subsidiary to that unit's general manager, the board announced on Friday night.
Lau Chin Guan has paid S$45,000 in cash for Metech Recycling (Malaysia) Sdn Bhd, under a sale and purchase agreement that was signed earlier in the day. The sale is set to be completed by Feb 9, or any other date - no later than a month from now - that the parties agree on.
The board said that it would use all the proceeds from the sale as working capital, and called the transaction "the most expedient way of exiting the EWM business in Malaysia".
It noted that Metech Recycling (Malaysia) has seen under-performance and continued losses, with only one employee besides Mr Lau, because of "its inability to obtain the necessary regulatory permits forelectronic waste treatment work".
The price tag in the transaction was reached at arm's length and is based on the equivalent of the target company's net tangible assets as at Dec 31, 2018, said the board.
It added that the transaction will make neither a gain nor the loss for Metech.
Mr Lau, a Malaysian who reports directly to Metech chief executive Andrew Eng, was convinced to take on the challenge of running the Malaysian unit after the company's lack of success in finding a buyer, said the Metech board in its bourse announcement.
Metech first tried to sell its core EWM business - which has units in the United States, Singapore and Malaysia - in a conditional sale and purchase agreement with Mr Andrew Eng, chairman and controlling shareholder Simon Eng, and his spouse Hau Chan Yen on Sept 18, 2018.
But that deal was later scrapped by mutual agreement.
Metech said on Dec 31, 2018 that it is reviewing terms and conditions in a stock purchase agreement from an American company - First America Metal Corp - as the audit committee found the offer for a majority stake in its American subsidiary to be better than what the Engs and Madam Hau had given.
Metech closed up by 0.1 Singapore cent, or 1.61 per cent, to 6.3 Singapore cents, before the news.