China Sky selling investment-holding unit to chairman for S$190,000

CHINA Sky Chemical Fibre Company is selling its wholly owned subsidiary, Deluxe Dragon International Limited, to the company's chairman He Zhidong for S$190,000.

The sale will be on an "as is where is" basis, where the buyer purchases the company in the condition it exists in, and accepts it with all faults.

Deluxe Dragon is an investment holding company and owns the China-incorporated Qingdao Zhongda Chemical Fiber Company Limited.

The judicial manager has deemed that it is in the best interests of China Sky's creditors to sell Deluxe Dragon's shares to Mr He as Qingdao Zhongda is debt-ridden and has no operations which the judicial manager can continue with.

The deal is considered a non-disclosable transaction as the net asset value of Qingdao Zhongda is likely to be negative, and there being no operations, it does not make any profits. In addition, the relative value of the transaction does not exceed 5 per cent of China Sky's market capitalisation, which is S$24 million as at Aug 12, 2016, the date of suspension of trading.