NSL to sell Thai unit for $328.3m
Sale will result in accounting gain of $119.8m
NSL CHEMICALS, a wholly owned subsidiary of NSL Ltd, has agreed to sell its entire 100 per cent stake in NSL Chemicals (Thailand) Ltd (NSCT) to SCG Chemicals Ltd for $328.3 million.
Investment holding company NSL Chemicals owns a stake of 22.83 per cent stake in Bangkok Synthetics Ltd (BST).
Based on the sale price and NSL Group's carrying value of NSCT as at Sept 30, 2013, the proposed sale will result in an estimated accounting gain of $119.8 million for NSL.
The long-term investment in Bangkok Synthetics was originally part of NSL Group's efforts to grow its chemicals division. In recent years, Bangkok Synthetics has undertaken a significant downstream investment plan and may continue to invest in new projects for the next stage of its development.
However, it noted that the petrochemical industry is cyclical and capital-intensive, with projects requiring a long investment horizon.
"In addition, BST is now no longer part of NSL's core strategy and as a result it is now in the best interests of NSL to divest this investment," the company said.
According to NSL, the sale will allow the company to better align its strategy to develop and grow its four core businesses - Construction Products, Environmental Services, Engineering and Chemicals.
It added that it will continue to evaluate opportunities to use the proceeds received from the sale to maximise returns for shareholders.
98 Holdings Pte Ltd, a consortium led by Singapore hotelier Ong Beng Seng which holds an 81.24 per cent shareholding in NSL, has provided an irrevocable undertaking to vote in favour of the sale at an EGM to be convened shortly.
The proposed sale is subject to certain conditions being met and post-completion adjustments.
Oo Soon Hee, executive director of NSL, said: "NSL was one of the founding shareholders of BST and we have been privileged to participate in its success over the last 20 years, which has been driven by the leadership and vision of Dr Pichit Nithivasin. SCG Chemicals, an existing shareholder in BST, is a major regional chemicals group and we believe that they will continue to make significant contributions to BST's future strategic initiatives."
NSL's shares closed 12.5 cents higher at $1.565 yesterday.
