Australia-listed Village Roadshow Limited (ASX:VRL) has agreed to sell its 50 percent stake in Singapore cinema exhibition business Golden Village to mm2 Asia Ltd (SGX:180).
In a disclosure to the Australian Securities Exchange, Village Roadshow said net proceeds after tax and transaction costs to VRL are anticipated to be approximately AU$175 million, with a net profit after tax of approximately AU$160 million.
The transaction is expected to complete in the first quarter of fiscal year 2018, subject to conditions precedent, including a capital raising by mm2 and other customary conditions. It also requires approval of shareholders.
“The proceeds of the sale will initially be use to reduce debt levels while allowing the company to progress its previously announced growth strategies,” Village Roadshow disclosed.
The sale of VRL’s stake is by way of a sale of 50 percent of the shares in the Hong Kong incorporated parent company of Golden Village and will not affect the operations of the business.
Golden Village Singapore will continue to operate its highly successful Singapore cinema exhibition circuit under the Golden Village brand and current management.
Village Roadshow is an Australian mass media and entertainment company with interests in a diversity of fields, including cinema, theme parks, film production and distribution.
The company is a publicly listed entity on the Australian Securities Exchange. It is majority owned by Village Roadshow Corporation, run by CEO Robert Kirby, John Kirby and Graham Burke.
The stock of Village Roadshow (ASX:VRL) gained 2.78 percent on Tuesday trading to 3.70 a share following the report. The stock has a 52-week low of 3.22 and a high of 5.57.- BusinessNewsAsia.com