Legend Group is to sell half its stake in a money-losing motherboard business, QDI, to computer components supplier Ramaxel Technology as it attempts to shore up receding margins in its PC manufacturing business.
Ramaxel, a Hong Kong company which develops and manufactures memory modules and universal serial bus products on the mainland, will buy 50 per cent of QDI at a 12.5 million yuan (HK$11.6 million) premium to the unit's net asset value as of the end of October.
Legend will set up a new joint venture - QDI Holdings - for the motherboard business, in which the two companies each will hold 50 per cent.
Chairman Liu Chuanzhi said the deal would allow Legend to focus on core operations. 'It has been the strategy of the company to concentrate on its core businesses of computer manufacturing, handset manufacturing and the provision of IT services,' he said.
Legend hopes Ramaxel's experience in electronics component manufacturing will help turn around the loss-making motherboard unit.
The business lost HK$41.08 million in the six months to September 30, compared with a profit of $8.78 million for the same period a year earlier.