Light at end of the tunnel? Ben Tiu sells TKC's China steel subsidiary to BVI firm for P1.7 billion
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Light at end of the tunnel? Ben Tiu sells TKC’s China steel subsidiary to BVI firm for P1.7 billion

TKC Metals of bilyonaryo Ben Tiu has lopped off its loss-making steel factory in China at no loss to the publicly listed firm.

TKC announced the sale of its Hong Kong-based subsidiary Billions Steel International Ltd. (BSIL) to Divine Token Limited (DTL), a British Virgin Island company, for P1.741 billion. TKC says it has no ties to DTL.

BSIL owns the steel pipe factory, ZZ Stronghold, which has been a major financial burden to TKC with the steep plunge in steel prices since 2013.

It has accumulated a capital deficiency of P1.2442 billion as of end-2021. Its plant was closed from August to September due to the lockdown and quarantine policies implemented by the local government.

TKC said the sale would ease its financial burden as “it will no longer be required to continue to fund the financial reverses being incurred by the China operations.”

“With the persistent low prices of steel products in China, the China operations are expected to continue to incur losses,” TKC said.

TKC said it would not book any losses from the deal as the sale price would offset its total equity investments in the steel factory. DTL would also assume advances made by TKC to the steel plant.

The buyer will pay an initial P481 million to TKC upon signing of the deed of assignment with the balance of P1.26 billion to be paid within four months.

 

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