HGL to sell its shareholding in MMC Contrarian
HGL and MMC Contrarian are splitting ways after the board of HGL announced it would sell its entire 14 per cent shareholding stake in MMC Contrarian.
HGL and MMC Asset Management launched MMC Contrarian in 2003 to invest in “solid ethical businesses at substantially discounted prices”.
HGL’s total proceeds from the sell-off are anticipated to be worth $21.3 million. The shares will be bought back by HGL as well as Guinness Peat Group.
HGL made the decision to sell off its investment in the listed company after MMC Contrarian switched its strategy from investing in equities and funds management businesses to a broader presence in the wealth management market.
In the last quarter, HGL took an after tax impairment charge of $7.7 million to profit and loss from the decline in the investment’s market value. The shares will be sold at MMC Contrarian’s pre-tax net tangible asset backing, having no effect on HGL’s profit and loss account.
The sale of HGL’s shares to GPG will be withdrawn if the price is less than 58 cents per share.
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