Talam Transform sells its 85% stake in Chinese unit for RM55 mil

KUALA LUMPUR (Jan 6): Talam Transform Bhd is selling its 85% stake in a Chinese unit that owns part of a defunct hotel in Jilin, China for RMB84.66 million (RM55.6 million) to reduce its losses and borrowings, and improve its liquidity position.

Talam Transform said in a bourse filing yesterday that the disposal, which is being effected by its indirect wholly-owned subsidiary Malim Enterprise (HK) Ltd, is expected to bring the group a net gain on disposal of about RM47.78 million, based on the net carrying value of Talam Transform's investment in the Chinese unit, Jilin Province Maxcourt Hotel Ltd (JPMH), which was RM73.38 million as at Jan 31 last year.

Malim Enterprise inked the sale agreement yesterday with Jilin Province Zhuo Ye Investment Co Ltd to sell the stake in JPMH, which was principally involved in the operation and management of the Maxcourt Hotel, which has since closed down.

"On completion of the proposed disposal, JPMH shall cease to be an indirect wholly-owned subsidiary of Talam Transform," the filing read. Proceeds from the disposal will be used to pare down the group's borrowings as well as for working capital purposes.

"In addition, [the purchaser] will also make available funds to JPMH of RMB95.34 million for the settlement of all JPMH’s debts,” the group added.

The group added that the consideration price was agreed upon after the consideration of MEL’s 85% equity interest in JMPHL’s net assets which amounted to RM0.53 million after deducting its accumulated losses.

The group added that the consideration price will be paid in two tranches, the first being RMB4.66 million and the second tranche will be RMB80 million, upon the submission and acceptance of prepared materials to the Trade and Industry Bureau of Jilin Province Business Hall.

TTB’s shares closed unchanged yesterday at 4.5 sen for a market capitalisation of RM189.87 million with some 20.9 million shares traded. — theedgemarkets.com