PNE Industries came out with an announcement (PDF) today. The company intends to dispose of their subsidiary PNE Print Technology, which was involved in the manufacturing and sale of pre-sensitized plates. Operations at PNE Print were ceased in November 2014, because it was unable to operate profitably.
PNE Industries is negotiating with potential purchasers, but there are no concrete offers yet. They expect that a successful disposal should bring 40m RMB to 50m RMB ($8.9m SGD – $11.1m SGD). This estimate is based on a valuation of the land and the building that PNE Print owns in China. This is a substantial amount, considering the market cap of PNE Industries is just $50.4m as I write this.
If they are able to complete the sale in this price range it would mean an excess of $3.2m to $5.5m over the book value of the assets.
This looks to be another positive development for the company and shareholders, much like the partial sale of the shares in PNE PCB last year.
Proceeds could be used for working capital or a special dividend:
The Company intends to use the proceeds from the Disposal Consideration for working capital. The Company may also consider declaring a special dividend upon completion or substantial completion of the Proposed Disposal, depending on the working capital requirements of the Group at that time.
Since the company has $30m in cash and only $10m of total liabilities, I think a special dividend is likely to follow if the sale of PNE Print is completed. PNE Industries also paid a special dividend after the sale of the PNE PCB shares.
Disclosure: long PNE Industries (SGX:BDA)