Tomei sells 45% stake in Hong Kong unit to tap local expertise
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Tomei Consolidated Bhd said it has disposed of 14.49 million shares that is equivalent to a 45% stake in its wholly-owned subsidiary Wealthy Concept Ltd (WCL) for HK$4.5 million (RM2.5 million), cash.
WCL is a Hong Kong-based company that is involved in the distribution and retail of jewellery. The stake was sold to two Chinese citizens Wang Guang (9.66 million shares; 30%) and Li Yi (4.83 million shares; 15%).
In its filing with the exchange, Tomei said the sale was to tap on the local expertise of its new shareholders in the retail of gold and jewelleries business in China.
It added that it intends to utilise the proceeds from the disposal as working capital.
Following the disposal, Tomei will be left with 17.71 million shares or 55% in WCL.
“The proposed disposal is not expected to have any material effect on the earnings, net assets, share capital and the substantial shareholdings of Tomei for the financial year ending Dec 31, 2015,” said the company.
Tomei closed 1 sen or 2% lower at 49 sen today, bringing its market capitalisation to RM69.3 million.
Questions & Answers
Q.What is the primary reason Tomei gave for selling a stake in Wealthy Concept Ltd?
What is the primary reason Tomei gave for selling a stake in Wealthy Concept Ltd?
Tomei stated the sale was made to use the local expertise of the new shareholders in the retail of gold and jewellery business within China. This partnership aims to benefit their operations there.
Q.What will Tomei do with the money received from this disposal?
What will Tomei do with the money received from this disposal?
The company intends to use the proceeds from the sale of its shares in Wealthy Concept Ltd as working capital. This suggests the funds will support day-to-day operations.
Q.How much of Wealthy Concept Ltd does Tomei still own after this transaction?
How much of Wealthy Concept Ltd does Tomei still own after this transaction?
Following the disposal of the 45% stake, Tomei retains 17.71 million shares in Wealthy Concept Ltd, which equates to a 55% ownership stake in the company.