Dharmala Holdings' controlling shareholder has sold almost half of its 55.52 per cent stake in the diversified company to Chinese medicine retailer Tung Fong Hung (Holdings) for about $56 million.
News of the deal, aimed at restructuring Dharmala's debts, follows a sale agreement reached last Friday between Tung Fong Hung and Dharmala's parent Dharmala International Holdings, controlled by Indonesia's Gondokusumo family.
The parent is selling 315.5 million shares, or 26.99 per cent of Dharmala, at 18 cents per share, a 153 per cent premium over the 7.1 cents closing price on Friday, its last trading day.
Dharmala, whose trading was suspended yesterday, is applying for a resumption today.
Dharmala International will retain a 28.53 per cent stake in the company, which will be transferred to 'a special purpose vehicle' to secure the parent's debts to bank creditors. Control of the vehicle would still be in the hands of existing shareholders.
Tung Fong Hung - 12.8 per cent owned by property developer and investor ITC Corp - will have the right to appoint up to four representatives as Dharmala directors. Tung Fong Hung also trades in securities business.