Garment retailer YGM Trading Ltd said on Wednesday it plans to dispose of a 63.77 per cent stake in another garment retailer, ILC International, for HK$280 million (US$35.9. in cash.
A YGM statement said that it would pocket the net proceeds from selling 408,000 ILC shares at US$88 each to investment holding firm Hang Ten International Holdings Ltd, and use the money for future investments.
Along with YGM, the Kung family will also sell its 30 per cent stake in ILC at US$88 per share to Hang Ten, as would a group of other investors who hold a 3.24 per cent stake.
Following the transactions, Hang Ten will hold 97.01 per cent of ILC. Hang Ten will pay a total cash consideration of US$54.6m for the stake in ILC, according to the YGM statement.
In addition, YGM said it would subscribe for 250,000 new Hang Ten shares, representing 25 per cent of Hang Ten’s enlarged issued share capital, at US$17 each for a total price of US$4.25m and would also provide a shareholder loan of US$5m to Hang Ten.
Shares of YGM last closed at HK$4.125. They have been suspended from trading since Monday but are expected to resume trade on Wednesday. YGM stock has lost about six per cent in the last three months.