Hap Seng Consolidated sells unit, cuts stake in another

PETALING JAYA: Hap Seng Consolidated Bhd is disposing of a unit and a stake in another to Hong Kong-based Lei Shing Hong Capital Ltd for RM1.68 billion.
Hap Seng is selling a 20% interest in Hap Seng Credit Sdn Bhd for RM906 million cash, while its unit HSC International Ltd is selling its entire interest in HSC Sydney Holding Ltd for US$196.50 million (RM771.16 million) cash.
HSC Sydney has a wholly owned subsidiary HS Credit (Sydney) Pty Ltd, which provides financial services. HSC Sydney was incorporated on Aug 18, 2017 and it reported a net loss of US$2,787 for the financial year ended Dec 31, 2017.
The HSC Sydney disposal, which was valued at a price-to-book ratio of 3.11 times, is expected to give rise to a gain of RM507.72 million to Hap Seng, which intends to use the proceeds to repay borrowings, for working capital, investments and expenses.
Hap Seng’s earnings per share is expected to increase from 42.36 sen to 63.38 sen following the proposed HSC Sydney disposal.
The proposals are subject to the approval of Hap Seng’s shareholders at an EGM and are expected to be completed by second quarter of 2018.
On Bursa Malaysia on Friday, Hap Seng fell 7 sen or 0.7% to RM9.55 on 548,600 shares traded.