Singapore-listed XMH Holdings, a provider of diesel engine for the marine and industrial sectors, has announced plans to dispose of its 80 per cent stake in Z-Power Automation Pte Ltd, an integrator for power, control, and system solutions.
XMH did not provide further details about the planned divestment, including the possible deal size, but said the disposal is part of the process of rationalising its business activities.
“The Board of Directors of XMH Holdings Ltd wishes to announce that the Group is in the process of rationalizing its business activities. As part of this exercise, the Group is contemplating a disposal of its 80 per cent stake in Z-Power Automation Pte. Ltd,” Board Chairman and Managing Director Tan Tin Yeow said.
It was in 2014 when XMH Holdings paid S$13.2 million (about $9.5 million) for an 80 per cent stake in the Singapore-based Z-Power Automation. The company acquired the stake from BH Global Corporation.
The remaining 20 per cent of the company is held by the four existing shareholders who will remain with Z-Power for a “considerable period of time” to extend their expertise to the company.
The purchase consideration of S$13.2 million was similar in size to the S$17.45 million which XMH paid for a 100 per cent stake in Mech-Power in 2013.
Z-Power provides customised in-house engineering and support services to clients based across Asia, Australia, Europe, and the Middle East. Incorporated in 2008, the company transformed from a local switchboard supplier to system integrator in the marine and offshore and energy firms, it said.
When it acquired Z-Power in 2014, XMH said the deal will allow it to expand its core businesses to include the supply of Z-Power’s marine switchboards, remote control distribution systems, motor control centers, shipboard cable installation, and other integrated marine automation products.
Early this month, XMH announced that it has recorded pre-tax losses for the three most recently completed consecutive financial years, based on audited full-year consolidated accounts.
The company also disclosed that its average daily market capitalisation over the last six months has been less than $$40 million, at just approximately S$20.5 million.
