XMH Holdings to dispose 80% stake in Z-Power Automation unit
XMH Holdings will be disposing its 80 per cent shareholding interest in its loss-making subsidiary Z-Power Automation (ZPA) for a nominal sum of S$1 to individual Goo Koh Chai.
Mr Goo is a businessman with various investment interests and the director of Inter Power Engineering (IPE Singapore), a manufacturer of switchboards, control panels, consoles for use in commercial buildings, industrial plants and factory equipment.
ZPA's business contributes approximately 16.4 per cent, 18.6 per cent, 13.8 per cent and 16.2 per cent, to the group's total revenue for FY2017, FY2018, FY2019 and the first quarter ended 31 July 2019 respectively. Losses of ZPA for FY2017, FY2018, FY2019 and 1QFY2020 amounted to S$3.2 million, S$1.8 million, S$3.8 million and S$0.8 million respectively.
As at 31 July 2019, the unaudited net tangible assets of ZPA amounted to S$1.6 million.
Based on the unaudited consolidated financial statements of the group for 1QFY2020, the book value of the sale shares amounted to approximately S$1.55 million and the net loss attributable to the sale shares amounted to approximately S$0.51 million. The open market value of the sale shares is not available as they are not publicly traded. No valuation of the sale shares was commissioned.
According to XMH Holdings, the disposal was carried out as part of the group's continuing efforts to rationalise its business and operations to improve its financial performance. This comes as the outlook for ZPA is unlikely to show prospect of a turnaround.
The company is of the view that the disposal will help it mitigate further losses and enable it to focus on its core business of providing diesel engine, propulsion and power-generating solutions to customers in the marine and industrial sectors.
There is no material change in the business profile of the group following completion of the disposal.
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Companies & Markets
Prudential shutters Hong Kong wealth unit Pulse
Singapore has to be realistic on global trends plaguing its stock market: DPM Wong
Google DeepMind unveils next generation of drug discovery AI model
AEM Holdings Q1 net profit tumbles 85% to S$2.4 million
World’s biggest tea buyer Lipton’s sale of last farms is a strategy shift
JPMorgan, Nomura limit Segantii exposure on Hong Kong case