ELEC & Eltek has strengthened itself to make a cash offer of $325.5 million to buy back 30 per cent of its issued shares by axing its capital-intensive property investment and development division.
The electronics manufacturer said its offer to repurchase up to 301.38 million issued shares of 10 cents each would be wholly financed by bank borrowings.
Chairman and chief managing director David So Cheung-sing said the company had saved money by ceasing investing further in property projects.
'We are not professionals in property development,' he said.
'Now the board of directors agree it is time to re-draft our priorities list and concentrate merely on our core businesses.' The company intends to consolidate its lead in printed circuit boards, while a new future direction for it was liquid crystal displays - a business which did not require a substantial amount of capital.
Elec & Eltek had recently invested $12.8 million for an 80 per cent shareholding in a domestic LCD business. Its position in this new-born division would be bolstered by opening a production factory in Dongguan.
Production volume is expected to double this year, Mr So said.