Onfem Holdings is to use $470 million earned from the sale of its 50.4 per cent stake in Oriental Metals (Holdings) Co to finance investments in the hi-tech sector. Onfem yesterday obtained approval at a special shareholders' meeting to sell 40 per cent of Oriental Metals to its parent, China Nonferrous Metals Holdings (HK), at $1.60 a share. It will receive $354 million from the deal, aimed at streamlining the structures of the two companies. During the past three weeks Onfem has sold its remaining 10.4 per cent interest in Oriental Metals on the market, reaping a further $116 million. Onfem deputy managing director Jia Yuan said the proceeds would enable the company to invest in industrial projects involving new hi-tech areas that showed good market and earnings potential. Investment projects under study included production of advanced ceramics and car-catalysts, and applications of tungsten. Agreements could be reached in the first half. Mr Jia said the disposal also helped reduce the gearing of Onfem to 20 per cent from 61 per cent, strengthening its fund-raising capability. Given the stronger cash position and lower gearing, there would be no need to tap the stock market for capital this year, he said. The company would receive more than $150 million if more than 50 million warrants were exercised by August, he said. Mr Jia denied that Oriental Metals had done injustice to its minority shareholders by not disclosing the loss of its exclusive trading rights in non-ferrous metals given by the mainland parent. The company first made the disclosure early this year because it was only then notified by the parent, although the privilege attached to the exclusive right had been fading as China further liberalised policies.