Investment management group Invicta Holdings will sell 51.19% of its Singapore-based machinery parts distribution company Kian Ann Group to entities controlled by Zou Jian Liang and associates and Loy Soo Chew.
The transaction will simultaneously allow for share subscriptions in Kian Ann by Invicta Asian Holdings and Zou to facilitate an increase of Kian Ann’s 27.604% shareholding in China-based heavy machinery parts manufacturer Kunshan Kensetsu Buhin (KKB) and its 50.01% shareholding in heavy machinery distribution operations investment company Modesty Investment Holding (MIH) to 100%.
The transaction will result in Invicta reducing its shareholding in Kian Ann from 100% to 48.81%.
Kian Ann owns Kian Ann Engineering and Kian Ann Investment, which house its investments in KKB and MIH.
Invicta Asian Holdings and Zou will each have 48.81% shareholding of Kian Ann, while Loy will hold 2.38%.
"The primary purpose of the transaction is to align the interests with Invicta’s Chinese partners in the primary growth areas of its business, being the US and China, which will allow for improved returns and asset allocation within the Invicta group.
"Kian Ann will additionally benefit from the vertical integration of KKB and MIH, which will become wholly-owned subsidiaries."
Post implementation of the transaction, Invicta’s effective indirect shareholding in KKB and MIH will be 48.81%.
Invicta will apply the net cash proceeds of R347-million in the short term to reduce the offshore debt component of the Invicta group, thereby realigning its funding objectives and enabling it to improve its return on capital employed.