SINGAPORE (Dec 24): Terence Tea Yeok Kian, executive chairman of Accrelist, which is gearing up for expansion into the aesthetics business, is trying to reorganise his stakes in  three of the separately-listed entities that he chairs, which also includes Jubilee Industries, and Bursa-listed EG Industries.

In an announcement on Tuesday, Jubilee said it will sell its 13.77% stake in EG Industries to Tea, for a cash consideration of $5.37 million. EG Industries is a contract manufacturer while Jubilee makes parts for the electronics manufacturing industry. Tea currently owns a 3.18% direct stake in the company. Upon completion of this sale, Tea will hold 16.95% of EG Industries.

As at March 31 2019, the NTA of the 13.77% block of EG Industries shares is carried on Jubilee’s books $11.3 million. The sale of the EG Industries shares from Jubilee to Tea will result in Jubilee booking a net loss of some $6 million.

Jubilee’s board sees the proposed sale as an opportunity to divest its investment in EG Industries for a reasonable consideration, to realise the value from its investment in EG Industries, and to also improve Jubilee’s liquidity and fund future working capital needs.

Later in the same day, Accrelist, in which Tea owns 23.08% directly, said in a separate announcement that it will sell 44.35 million Jubilee shares, or 17.5%, to EG Industries for $6.95 million. These shares are now carried on Accrelist’s book at $7.4 million. Accrelist will book a loss of $0.5 million from the sale. EG Industries, in turn is a substantial shareholder of Accrelist, with a 5.21% stake.

Upon completion of the sale, Accrelist’s stake in Jubilee will be reduced to 48.32%, or 122.47 million shares. These Jubilee shares will then be distributed in specie to all Accrelist shareholders. Each shareholder owning one Accrelist share will be entitled to 0.3855 Jubilee share. Accrelist, as a listed company, will no longer own any Jubilee shares.

According to Accrelist, the disposal of its stake in Jubilee would benefit the company and its shareholders as it creates flexibility and unlocks value for shareholders who will benefit from greater synergies and expertise through EG Industries.
Accrelist will then focus fully on growing its aesthetics clinics. It has set its sights on opening a chain of such clinics in Malaysia and Vietnam.

Accrelist says that a circular containing further details of the proposed disposal, capital reduction and distribution of shares, as well as the notice of an extraordinary general meeting (EGM) will be despatched to shareholders in due course.

Following Jubilee’s announcement of the sale of its stake in EG to Tea, shares in the company had surged 27.5% to close at 10.2 cents on Tuesday.

Shares in Accrelist, however, fell 11.9% to close at 7.4 cents on Tuesday.

Even as Tea reshuffles his stakes in the various listed entities, a substantial shareholder of Accrelist has converted a loan to new shares. In an announcement on Tuesday, the company said that an entity called Singapore Rixin Zhonghe Investment now owns 12.13% of Accrelist’s enlarged share base of 317.66 million shares. This follows the conversion of debt to 38.52 million new shares at 10.8 cents each, as part of a $4.16 million convertible loan agreement.