SINGAPORE – Mechanical and electrical engineering firm Libra Group plans to sell its 51% stake in Malaysian travel agency YC Capital Consolidated Sdn Bhd (YCC) to Libra’s CEO and executive chairman Chu Sau Ben for US$12 million in cash.
The proposed sale is for the amount Libra paid him when it acquired YCC from Mr. Zhu, who is also the company’s controlling shareholder, last March.
If proceeded and completed, the proposed sale is expected to constitute an interested person transaction as well as a major transaction under the Catalist Rules. Accordingly, the matter is subject to shareholder approval by ordinary resolution at the EGM.
The Catalist-listed group signed a memorandum of understanding (MOU) with YCC and Mr Zhu on Monday. The company said in a Monday evening filing that the memorandum of understanding is not intended to be legally binding on the parties, except for certain provisions related to, among other things, the payment of deposits.
Following the signing of the MOU, Libra has received a non-refundable cash deposit of US$2.5 million in part from Mr. Zhu. This deposit will offset the $12 million in cash payable by Mr. Chu to Libra on the date of completion of the definitive sale and purchase agreement.
YCC was acquired by Libra on March 28, 2018, as part of the latter’s plan to expand its leisure and business travel business in Asia, including arranging air tickets and accommodation, as well as advising on leisure travel packages.
However, the group’s directors said in the filing that the factors supporting the acquisition of YCC “have changed since the departure of YCC’s senior management team in October 2018”.