SHARES of Broadway Industrial hit a near 3.5-year high on Tuesday after the precision manufacturer announced it received a US$50 million offer for its hard disk business from the largest production outfit of the Seksun group of companies.

 

The counter hit an intraday high of 16.6 Singapore cents on Tuesday, up 33.8 per cent or 4.2 cents as at 4.40pm. The last time the counter closed near this level was on April 5, 2017.

 

The stock was also the sixth most traded by volume on the Singapore bourse, with 103.8 million shares changing hands at market close. The counter closed up 33.1 per cent or 4.1 Singapore cents at 16.5 cents on Tuesday.

 

On Tuesday morning, Broadway Industrial said it received a binding letter of intent (LOI) from Seksun Technology (Suzhou) Co. Under the LOI, which Broadway Industrial received on Monday, the potential buyer plans to acquire substantially all assets used in Broadway Industrial' s actuator arm and related parts manufacturing operations.

 

These are the assets and properties owned by BIGL Technologies (Shenzhen) Co, excluding the land and buildings situated at Pingshan Street in Shenzhen and covered under Shenzhen Title Certificate No 0227103. The target assets also include any mutually agreed properties or assets between the parties.

 

The proposed US$50 million purchase price is subject to certain assumptions, including assumptions relating to the financial conditions of Broadway Industrial' s actuator arm and related parts manufacturing operations, the group said.

 

Incorporated in China, Seksun Technology (Suzhou) Co' s core competencies are in precision metal stamping. The company serves customers from the hard disk drives, consumer electronics, automotive and telecommunication industries.

 

It falls under the Seksun group of companies - a metal stamping specialist with manufacturing operations in Singapore, Thailand and China.

 

Prior to its privatisation, Seksun was listed on the Singapore Exchange' s (SGX) mainboard. It took on the name Enporis Greenz after selling its assets and business undertakings for S$295.1 million in late-2007. Enporis delisted on Aug 1, 2009, after failing to secure a further extension of time from SGX to acquire a new business.

 

Broadway Industrial is one of the few remaining Singapore-listed hard disk drive component makers. Others include Cheung Woh Technologies, Santak Holdings and Miyoshi.

 

Broadway Industrial' s largest shareholder is Lau Leok Yee, the widow of former executive chairman Wong Sheung Sze. She holds a total interest of 32.1 per cent in the company, according to the company' s annual report.

 

Non-independent board chairman Lew Syn Pau holds a 9.5 per cent stake.

 

Before its announcement that it received a non-binding indicative proposal to dispose of its hard disk drive business in May 2020, Broadway Industrial traded at a significant discount to its net asset value of 14.62 cents as at March 31.

 

BROADWAY Industrial Group on Nov 17 received a draft binding letter of intent from a potential buyer to acquire its hard disk drive business.

 

At the time, the company was " confident" an agreement would follow, and thus requested a trading halt on Nov 18 morning to prevent any unusual trading activity which may result from any potential leaks of a possible transaction.

 

However, further negotiations with the potential buyer were required, and thus no binding agreement has been reached yet, Broadway Industrial said in a bourse filing on Sunday night.

 

The mainboard-listed precision manufacturer added that it remains in negotiations with the potential buyer for a possible transaction.

 

Broadway Industrial lifted the trading halt on Monday before market open. The stock rose 0.1 Singapore cent or 0.8 per cent to trade at 12.2 cents as at 11.25am, after 7.6 million shares changed hands.

 

On May 28, the company announced it had entered into a non-binding indicative proposal to dispose of the hard disk drive business by selling its wholly-owned subsidiary BIGL Asia. This drove its shares to surge by 24.5 per cent the next day.

 

Broadway Industrial did not disclose the interested party' s identity, but said the potential buyer intends to retain BIGL Asia' s key management and technical staff.

 

Broadway Industrial had initially planned to execute the sale and purchase agreement by Nov 15 and to complete the sale by Dec 30.

 

On Sunday, it said that the group' s strategic review to diversify and expand its existing business and to unlock shareholders' value remains an ongoing process.

 

The company will make further announcements to update shareholders of any material developments in relation to the strategic review, including those for the possible transaction.