Novena names financial adviser for sale of business

By Daniel Buenas
May 3, 2007
The Business Times

NOVENA Holdings yesterday announced that it has appointed Stirling Coleman Capital as financial adviser for the planned sale of its core furniture businesses to TT International.

The company had earlier announced plans to sell several of its subsidiaries to TT International for around $13.5 million.

As part of the deal, TT International will issue up to 67.5 million new TT shares to Novena at 20 cents each to acquire Novena's furniture business, which includes its seven brand names and registered trademarks as well as six wholly owned units and three industrial properties.

With the completion of the deal, Novena will emerge holding about 16.67 per cent of the issued and paid-up share capital of TT International.

Novena said the disposal of its furniture business is expected to generate a one-off gain of around $8 million for FY2007, and said the move was in response to changes in consumers' retail concepts.

It said that the company would 'continue to face new challenges' in growing its furniture business, and had considered an expansion of its local and overseas distribution network to gain global scale.

'This strategy, which would entail significant risk, human resource investment and capital which may have to be raised from the shareholders, does not guarantee good returns for the group,' the company said. 'In view of the above, the board has decided on the proposed disposal, which offers to divest the furniture business at an attractive premium to the net tangible asset value of the furniture business.'

Novena also said that, post disposal, it would retain its beauty division and its interests in its overseas furniture manufacturing operations in China.

'The company is evaluating investment opportunities in business areas relating or complementary to its other existing business in the beauty division and possibly new business areas other than the furniture business,' it said.

Shares of Novena Holdings ended 1.5 cents higher yesterday at 39.5 cents.