Computer and electronics distributor Hanny Holdings has sold its consumer retail operations and plans to become an investment holding company specialising in a portfolio of property investments and stakes in listed Hong Kong companies, according to a source close to the group. The comments came in the wake of news that Hanny - indirectly controlled by dealmaker Charles Chan Kwok-keung - had sold its jointly held 67 per cent stake in Memorex International, the largest DVD distributor in the world. A United States-based maker of data storage, Imation Corp, disclosed it was the buyer of the stake on its website, adding that the all-cash transaction priced Memorex at US$330 million, with a further US$45 million to be paid over a period of up to three years depending on financial performance. After the sale, which Imation said it hoped to close in the second quarter of the year, Hanny would hold a basket of property projects and Hong Kong-listed vehicles that maintained ties with Mr Chan, according to the source. Mr Chan, who holds a 20.5 per cent stake in Hanny through his 33.6 per cent-held listed flagship, ITC Corp, had been progressively shifting his investment focus from overseas to China in the past few years, the source said. The sale of Australian construction firm Downer EDI by Paul Y, which is 49.96 per cent owned by ITC, was an example of the strategic shift in investment focus, the source added. Hanny and Investor Asia, a private equity firm, which together indirectly own 67 per cent of Memorex, have agreed to vote their shares in favour of the sale, according to the Imation report on the deal. The two shareholders indirectly hold 44.67 per cent and 22.33 per cent, respectively, in Memorex. Shares of Hanny have been suspended pending an announcement of a substantial transaction. The stock closed at $4 on Friday. Memorex holds shares of 27 per cent and 32 per cent, respectively, in US market sales of DVDs and compact disc recordables.
