Yong Tai disposes of subsidiaries for gain of RM6.77m

by **Cals** Wed 01 Jul 2015, 01:13

Yong Tai disposes of subsidiaries for gain of RM6.77m

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By Chester Tay / theedgemarkets.com | June 30, 2015 : 9:10 PM MYT

KUALA LUMPUR (June 30): Textile and garment products retailer [size=14]Yong Tai Bhd ([You must be registered and logged in to see this image.] Financial Dashboard) is disposing of two loss making subsidiaries for a gain of approximately RM6.77 million or 4.2 sen per share.

In its filing to Bursa Malaysia today, Yong Tai (fundamental: 0; valuation: 0) said it has entered into two share sale agreements with Extreme Riches Sdn Bhd to dispose of its entire equity interest in Golden Vertex Sdn Bhd andThe Image Outlet Sdn Bhd for a total cash consideration of RM2.00.

Yong Tai noted that there will be a gain because Golden Vertex and Image Outlet have combined audited net liabilities of RM6.77 million.

Besides, the group also expects there will be an inter-company debt repayment of RM9.1 million from the said subsidiaries.

The principal activity of Golden Vertex is manufacturing of garment, nylon, yarn and tailoring articles. Image Outlet, meanwhile, is principally involved in the sale of garments and tailoring articles for the golf and leisure wear under the brand of “Emilio Velentino”; it also markets children’s wear under the brand “Tom Kids”.

In a separate press statement, Yong Tai executive director Ng Jet Heong said the corporate exercise is in line with Yong Tai’s strategic imperative to streamline its asset portfolios in order to focus on its new core business in property development.

“The disposal is part of Yong Tai’s strategic business rationalisation plan to concentrate on its core property development business,” he said.

The disposal is expected to be completed by the third quarter of 2015.

Yong Tai also said it is in the midst of improving the operational efficiency of its property development business segment by lowering its operating and administrative costs in the textile and garment business segment.

The group’s share price fell one sen or 2.11% to 46.5 sen today, giving it a market capitalisation of RM57.16 million.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)
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