Ezcom Holdings plans to spend HK$88 million for a stake held by chairman Kok Kin-hok in a Korean mobile technology company.
If the proposal goes ahead it will be the second time in a year that Mr Kok has injected personal assets into Ezcom, a mobile-phone dealer that he is trying to build into a fully-fledged mobile services supplier.
Under the agreement signed on Friday, Ezcom will issue a two-year convertible note to Mr Kok in exchange for his 35.48 per cent stake in Ezze Mobile, a Korean company which provides technology support to mainland No 3 handset manufacturer Kejian.
The non-cash transaction, which needs shareholder approval, is expected to be completed before November 15. On conversion, Mr Kok's stake in Ezcom will increase to 43.16 per cent from 33.3 per cent at present.
Mr Kok can convert these notes at 10 HK cents, or a 25 per cent premium to its last closing price of eight HK cents on Wednesday.
The transaction valued Ezze Mobile at HK$88 million, or about 11.3 times price to earnings of its last year profit of about HK$22 million.
Executive director Samuel Lam Bing-sum said the injection was valued at a significant discount of about 34.4 per cent based on the latest fund raising by Ezze.