Why NSL sold its "crown jewel" BST stake for S$120m

See where it's spending the fresh capital.

NSL announced the sale of its 22.83% stake in Thai associate, Bangkok Synthetics Limited (BST), to a unit of Siam Cement for SGD328m, which OSK-DMG reports is part of a strategic re-alignment.

The research firm noted that even though for the past 5 years, BST has been a key contributor for NSL, accounting for 40-70% of group pre-tax profits, NSL decided to sell its stake since BST no longer fits the group’s current core strategy.

"At the same time, it is now entering into a capital intensive phase with its downstream investment plans and a long gestation period is required for its new projects to bear fruits. The sale would also allow the group to better align its strategy to develop and grow its remaining businesses," said OSK-DMG.

On completion, NSL will recognise a gain of SGD120m, with its NTA/share raised from SGD1.52 to SGD1.84. Net cash will also be bolstered from the current SGD74m to SGD400m, representing SGD1.07/share. The sale is still subject to shareholders’ approval and various closing conditions.

NSL is currently majority-held by 98 Holdings Pte Ltd - a consortium led by Singapore tycoon Ong Beng Seng, which has a controlling stake of 81.2%. It has given an irrevocable undertaking to vote in favour of the sale, said OSK-DMG.