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New Silkroutes Group sells stake in International Energy Group for US$10m

A SUBSIDIARY of New Silkroutes Group (NSG) has sold its entire stake in International Energy Group (IEG) for US$10 million in cash, the group said in a Singapore Exchange filing on Monday.

The sale of the oil and gas trading company by New Silkroutes Capital is subject to certain conditions, including approvals from the SGX and shareholders. Following the disposal, the company will become a full-fledged healthcare group.

The purchaser is TK Energy, a private limited company incorporated in Hong Kong with stakeholders who have interests in the oil and gas sector subsidiary. It will extend a loan of US$10 million to NSG, which will be deemed repaid in full when the disposal is completed.

It will also make available to IEG credit facilities of up to US$250 million, of which an initial loan of US$50 million will be advanced to IEG and later capitalised as shares when the sale is completed.

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"The sale will provide the group with the funds to expand its healthcare business locally and regionally, through a mix of acquisitions, collaborations and organic growth," said Goh Jin Hian, NSG's CEO.

"Moving ahead with healthcare as our core focus, we aim to deliver shareholder value in the longer term. For a start, NSG has plans to resolve the issue of long-standing negative retained earnings with capital reorganisation. After this exercise, NSG will have a more efficient capital structure, and will be well-positioned to start dividend payments, thereby improving shareholders' return on equity."

NSG will convene an extraordinary general meeting to seek shareholders' approval for the proposed disposal, and will despatch a circular with details to shareholders in due course.

The stock last traded at US$0.185 on March 22.