Sale of Taiwanese subsidiary

RNS Number : 4851C

UniVision Engineering Ltd

28 June 2016

 

28 June 2016

UniVision Engineering Limited

("UniVision", the "Company" or the "Group"))

Sale of Taiwanese subsidiary to Group Executive Chairman

UniVision, the AIM quoted, Hong Kong based designer and installer of digital surveillance and integrated security systems announces today that it has entered into an agreement in principle to sell its Taiwanese subsidiary T-Com Technology Co. Ltd ("T-Com") to Stephen Koo ("the Transaction") Stephen Koo is Executive Chairman of UniVision and is interested in 72.9% of its share capital.

Terms of the Transaction are as follows:-

1.   UniVision disposes its entire holding shares in T-Com to Stephen Koo.

2.   The cash consideration for the transaction is HK$600,000.(Hong Kong Dollars  Six Hundred Thousand).

3.   All amounts due to UniVision by T-Com to be settled within 24 months of the transaction.

4.   UniVision will have an option to repurchase its shareholding in T-Com for the same consideration of HK$600,000 plus 3% per annum as repurchase price for a period of 5 years from the sale of the shares.

UniVision currently own a 52.25% interest in T-Com and at 31.March 2016, T-com had net assets of NTD12.5m (approx. HKD3.0m) including a loan due to a minority shareholder  NTD6.5m (HKD1.5m) and additional sums due to UniVision and its subsidiaries ("the Group") of NTD3.9m (HKD0.93m)

As announced on 31 May 2016, T-Com recorded an operating loss of NTD25.5m (approx. HKD6.2m) for the financial year ended 31 March 2016. It was mainly as a result of 52 per cent decrease in construction revenue, significant decrease in gross profit ratio and one-off liquidated damages NTD4.8m (approx. HKD1.2m) paid to a local customer. The Taiwanese subsidiary has seen no upturn in operations subsequent to the year end and the Directors of UniVision see no immediate prospect that the situation will change in the near future. Further, they are concerned that as UniVision seeks additional funding from the Peoples Republic of China, the Taiwanese business could be adversely affected by political sensitivities.  Because of the poor trading and the need to replace personal guarantee of T-Com borrowings made by Stephen Koo, the Directors consider that a third party sale on better terms would be difficult to find. At the same time, the Directors believe that a liquidation of the business would be difficult because of long term contracts with customers that cannot be easily terminated. The potential liquidated damages will be substantial for the non-performance of those contracts.

The Transaction will enable UniVision to avoid the future losses of the Taiwanese operations to the Group while offering it the ability to repurchase this business without loss, if a turnaround is achieved.

The Independent Directors, being the Directors of UniVision excluding Stephen Koo who is interested in the Transaction, have consulted with ZAI Corporate Finance Limited and consider that the terms of the transaction are fair and reasonable in so far as the shareholders of UniVision are concerned.

For further information visit www.uvel.com or contact:

UniVision Engineering Limited                                   Tel: [phone]

Stephen Koo, Chairman                                                        www.uvel.com  

Chun Pan Wong, Chief Executive Officer

Danny Kwok Fai Yip, Finance Director

Nicholas Lyth, Non-Executive Director                           [phone]

ZAI Corporate Finance Limited

(Nominated Adviser and Broker)                             Tel: [phone]  

Tim Cofman or Songdi Lin                                                         www.zaicf.com           

 

END

 

 

DISKVLBLQQFXBBK