Jinhui’s wholly-owned Pantow Profits will dispose of its entire 75% stake in Yee Lee Technology Company (YLTC) to Asiawide Profits, which already owns 25% in YLTC.
YLTC is an investment holding firm principally engaged in trading chemical and industrial raw materials serving various industries.
The purchaser Asiawide Profits is owned by Lau Kam Hung, a director of YLTC, making both the purchaser and Lau as connected persons at the subsidiary level of Jinhui.
The sale of YLTC is priced at HKD32m ($4.1m) but Jinhui is only expected to pocket HKD64,000, which will be used as general working capital.
Jinhui said the Hong Kong government recently terminated the tenancy of the premises that YLTC has been using as the sole storage location of its trading goods in Hong Kong.
“Having considered the limited future growth prospect of YLTC, its limited synergies with overall business strategy of the group, the management considered the disposal would allow the group be better focus and concentrated its resources on shipping business in the prevailing tough operating environment,” Hong Kong-listed Jinhui explained.
“The disposal also allows the management to consider other business which could bring synergy to the shipping business in the future,” it added.
In the financial year ended 31 December 2014, YLTC made a loss of HKD6.04m, as against a profit of HKD662,000 in 2013.
Jinhui’s shipping arm recently announced a first quarter profit of $4.69m as against the deficit of $3.2m in the previous corresponding period.
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