CONSUMER electronics distributor Thakral Corporation has dropped plans to switch its core business into real estate.
‘In view of the proposed capital reduction announced on Dec 1, 2009, the board has on Dec 17, 2009, resolved not to proceed with the proposed business diversification,’ the company said yesterday.
Thakral’s board had proposed early this month to return $130.6 million to shareholders via a capital reduction, involving a cash distribution of five cents a share. The move came as the board failed to agree on how to use or invest the company’s surplus cash reserves.
Major shareholders of Thakral – the Hong Leong Group and the Thakral family – had been at odds over the company’s future direction.
Thakral had in May last year suggested divesting its core consumer electronics distribution business to reposition itself in real estate. It already had some property operations, though these were not seen as its main business.
However, Hong Leong did not support the plan and wanted Thakral to stay in its principal field. The repositioning was supposed to be put to a vote by shareholders.
Yesterday’s announcement marks the end of Thakral’s planned repositioning. But the company added that it ‘has always had an ancillary business in real estate and will continue to evaluate and invest in property ventures within the available funds so as to improve the overall returns for shareholders’.
Source: Business Times, 23 Dec 2009