Glonghui August 1st 丨HM INTL HLDGS (08416.HK) announced that on July 31, 2023, the seller (including HM Investment, an indirect wholly-owned subsidiary of the company) and the buyer (each an independent third party) entered into a sale agreement. According to this, (i) the Wordbee seller conditionally agreed to the sale and the Wordbee buyer conditionally agreed to acquire all of the company's issued shares (including the sales shares); and (ii) the Wordcraft seller conditionally agreed to the sale and the Wordcraft buyer conditionally agreed Acquire all of Wordcraft's issued share capital.
Of the shares of the sold company to be sold by the Wordbee seller, the sales shares to be sold by HM Investment account for about 22.85% of the total issued share capital of the selling company. The selling company is the company's contact person. The Group does not hold any interest in Wordcraft.
According to reports, the sales group includes the sales company and its subsidiaries (i.e. Wordbee LLC and Wordbee Egypt). The selling company is a technology company incorporated in Luxembourg. It is mainly engaged in business development of content management software and network collaboration spaces, translation process management and globalization/content localization, rental translation and localization of cyberspace, and provision of translation services, localization and globalization for Luxembourg content technology companies. The company has extensive experience in tools and language technology training and consultation for large-scale projects. Wordbee LLC is a limited company incorporated in the US, wholly owned by the selling company. Wordbee Egypt is a limited company incorporated in Egypt. The selling company and Mr. Andre Hemker own 90% and 10% respectively. Both Wordbee LLC and Wordbee Egypt are mainly engaged in providing translation technology and content strategies and solutions.
After considering (i) a maximum cost of 3 million euros (equivalent to approximately HK$26.1 million); and (ii) the book value of investing in the equity method of a joint venture company, along with the difference of about 1,088,800 euros (equivalent to approximately HK$9.4727 million) in the estimated cost of the sale, it is anticipated that the Group will record a maximum estimated net profit of about €1,912,200 (equivalent to approximately HK$16.6273 million) from the sale.
The company's directors believe that the sale is a good opportunity for the Group to monetize its investment in selling the company and allows the Group to deploy its resources more effectively. The Board considers that the sale allows the Group to sell its investments in exchange for proceeds as general working capital and further expand the Group's business when relevant opportunities arise. Furthermore, the sale will provide the Group with immediate cash flow to enhance its cash position and improve the Group's overall liquidity.
The Group intends to use the net proceeds from the sale as general working capital and further expand the Group's business. Taking into account the net proceeds from the sale and the Group's financial position at the time, the company may consider issuing a special dividend at the end of 2023.