XMH Holdings is selling 14.8% in a fully-held unit to Mitsubishi Heavy Industries Energy System Asia for $12.3 million, and will be booking a gain if $10 million from this deal.

 

According to XMH on Sept 15, after selling this stake in Mech-Power Generator, the latter will remain as a subsidiary, which is in the business of assembly and sale of generators and related accessories.

 

The buyer, an indirect subsidiary of Japan' s Mitsubishi Heavy Industries, is an existing supplier of generators and marine engines to XMH in the Asia Pacific region.

 

" The proposed disposal presents a strategic opportunity to establish and foster closer collaboration between Mech-Power and MHIESA and to enhance strategic partnerships and operational synergies between them," says XMH.

 

Following the deal, Mech-Power will work closely with MHIESA on production capabilities and capacity.

 

This deal will enable Mech-Power to leverage MHIESA' s established business network, thereby expanding its market reach beyond its current customer base.

" This expansion is expected to generate additional revenue streams and in turn improve shareholder value and returns," the company says.

 

The sale is also a " good opportunity" for XMH to realise an appreciation in value over its investment in Mech-Power, and channel proceeds to improve its working capital and explore new opportunities for investments.

 

XMH Holdings shares closed at $1.65 on Sept 15, up 0.61% for the day and up 132.39% year to date. This gives the company a market value of nearly $190 million and a historical PE of 7.08x.