King Wan pockets $9mln with completion of Cables' divestment

Company plans to use proceeds from sale to Halcyon Energy to fund expansion moves.

Mainboard-listed King Wan Corporation Limited (King Wan) on Wednesday announced that it has completed the sale of its associate company, Cables International Pte. Ltd. (Cables), a transaction that it has begun negotiating since the middle of the year, according to a King Wan report.

The transaction was subject to the customary closing conditions and the relevant approvals, which have now been received. All other conditions have also been met.

The company sold its entire 30% shareholding interest in Cables to Halcyon Energy Corporation Pte. Ltd., and the whole consideration was satisfied on completion by a cash payment of S$9.0million. The Group’s initial investment in the cables business was approximately S$0.6million for the 30% ownership stake.

This transaction is expected to contribute S$4.3million to the Company’s earnings for financial year ending 31 March 2011.

Ms Chua Eng Eng, Managing Director of King Wan, was very pleased that the transaction went well and was successfully completed. She said: “We expect to use the net proceeds to fund business expansion activities,which may include potential mergers and acquisitions.We may also consider using part of it as dividend payout to shareholders.”

KingWan is an integrated building services company with principal activities in the provision of M&E engineering services for the building and construction industry. It also operates in three other business segments, namely Property, Manufacturing and Services.

The company announced substantial improvement in net profits to S$6million for its first financial quarter ended 30 June 2010, up 127% from the corresponding quarter in the previous year, on revenues of S$9million.