CATALIST-LISTED Plato Capital said on Monday (May 8) that its 70 per cent subsidiary, Positive Carry, has entered into a conditional sale-and-purchase agreement (SPA) to sell its 27 per cent stake in TYK Capital to a Singapore-based private equity firm for a consideration of RM120 million (S$35.8 million).

In a bourse filing, Plato Capital said that its 70 per cent share of the sale consideration will be RM84 million. The disposal is expected to result in a gain to the group of around S$18.6 million, Plato Capital said. Its share of the carrying amount of Positive Carry’s investment in TYK was S$6.5 million as at Dec 31, 2022.

Plato Capital previously said in January that it had received a non-binding offer for the TYK stake. It announced on Monday that the buyer is Enzo II Holdings, a special-purpose vehicle managed by Singapore-based private equity firm PrimeMovers Equity (S). The buyer is an existing shareholder of TYK.

Plato Capital’s directors said that the disposal is in the group’s interest, as it will enable the company to realise the value of an investment outside its core focus areas of hospitality and education after an 11-year holding period. The move will also improve its cash flow.

The directors noted that the disposal will “provide liquidity for new investments and initiatives that will enhance shareholder value”, and provide additional working capital for the group’s operations. 

On a pro forma basis, the disposal would have resulted in the group’s net tangible assets growing to S$4.93 per share as at December 2022, up from S$3.40.

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The bourse filing indicated that the completion of the SPA is “conditional upon certain conditions to be fulfilled by parties to the SPA on or before Oct 31, 2023, or such other extended period as provided in the SPA”.

Plato Capital last traded at S$1.91 before it called for a trading halt on May 4. At that price, the company had a market capitalisation of S$23.3 million.