Singapore Reinsurance proposes sale of its 85% stake in publishing unit for S$1.3m
SINGAPORE Reinsurance Corporation has proposed to sell its stake in subsidiary INS Communications, a publishing and conference organisation company, for S$1.3 million in cash, the mainboard listed company said in a bourse filing on Monday.
Singapore Reinsurance holds an 85 per cent stake in INS, while Subramaniam Mokanasivam and Sheela Suppiah hold 10 per cent and 5 per cent respectively.
The three sellers on Friday entered into a sale and purchase agreement for INS with Beacon International Group for a total consideration of S$1.5 million. The buyer publishes Insurance Advocate, said to be US's oldest continually published insurance medium, and Business Insurance, one of the oldest insurance magazines worldwide.
The consideration was arrived at after arm's length negotiations, taking into consideration INS's reserve fund amount and net tangible assets.
In addition, Beacon International will pay the sellers 75 per cent of INS's S$522,000 reserve fund at the completion of the proposed sale - with Singapore Resinsurance entitled to S$443,700 - and 25 per cent of INS's net profit after tax from FY21-24.
Singapore Reinsurance said the consideration and reserve fund amount represent an excess of S$868,700 over the book value of the 850,000 shares disposed of by the company.
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For illustrative purposes, the proposed sale is expected to raise Singapore Reinsurance's profit per share from 1.45 Singapore cents to 1.61 cents.
Singapore Reinsurance said digital and social media, while providing new opportunities for INS, also presented "huge challenges" as competition had increased. "New entrants with no legacy issues can easily foray into the field," it said.
It added that the proposed sale is beneficial to the group's continued development and will enable it to focus on workingcapitalits core operations. The company plans to use the entire proceeds of the proposed sale for working capital.
Shares of Singapore Reinsurance ended Friday at 28.5 Singapore cents, up 0.5 cent or 1.8 per cent.
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