Tan Chong sells stake in associate company for 249.7b rupiah

TAN Chong International on Wednesday said it has disposed of its stake in associate company Tifa Finance for some 249.7 billion rupiah (S$23.2 million).

Tifa is a multi-financing company that provides leasing, consumer financing and factoring financing services in Indonesia.

Tan Chong's three wholly-owned subsidiaries - TCC, T8 Gallery, and TC Auto World - have sold their 44.5 per cent stake in Tifa to the Korea Development Bank (KDB), the group announced in a regulatory filing.

The three subsidiaries, along with other sellers, had collectively entered into an agreement with KDB to sell an 80.7 per cent equity interest in Tifa for 452.8 billion rupiah.

The aggregate consideration was paid by KDB on Sept 8 to the respective sellers. As a result of the disposal, Tan Chong recorded a gain of 78.2 billion rupiah.

As at June 30, Tifa's net asset value stood at 384.6 billion rupiah, while its net profit after tax for the year ended Dec 31, 2019 was 33 billion rupiah.

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Tan Chong's directors are of the view that "the pricing for the disposal is fairly valued" and that the deal is in the interests of the company and its shareholders as a whole.

Upon completion of the disposal on Sept 8, Tifa is no longer an associate company of Tan Chong and its financial results have ceased to be equity accounted for in Tan Chong's accounts, the group said.

Tan Chong distributes motor vehicles and industrial equipment. The group's principal business also includes property development and rental, vehicle seat manufacturing, as well as the provision of vehicle transportation and human resource management services.

Tan Chong shares were trading at HK$2.02 as at 10.49am on Wednesday, up HK$0.03 or 1.5 per cent on an ex-dividend basis.