Yue Yuen Industrial (Holdings) Limited has disposed of approximately 44.8 millions shares of Pou Chen Corporation on the open market on the Taiwan Stock Exchange. The Group will realize a gain of approximately US$23 million through the disposal.
Pou Chen is the major shareholder of Yue Yuen and has maintained a close business contact with Yue Yuen in raw material sourcing and the upstream businesses. The acquisition of shares in Pou Chen was originally for the purpose of securing better raw material supplies.
However, it is Yue Yuens strategy to improve corporate transparency and reduce connected transactions.
To follow this strategy, the Yue Yuen had acquired 67 companies from Pou Chen, which were mainly engaged in upstream businesses in November 2002. Vertical integration into the upstream businesses has greatly enhanced Yue Yuens production efficiency and further reduced connected transactions with Pou Chen. Yue Yuen therefore, considers this is the appropriate time to liquidate the entire strategic shares investment portfolio in Pou Chen and realizes gains from the disposal.
It is also an on-going strategy for Yue Yuen to dispose of non-core assets and deploy the resources into the core footwear and apparel related manufacturing businesses. Disposal of shares investment portfolio is a demonstration of Yue Yuens commitment to this strategy. The divestment is expected to reinforce Yue Yuens focus and further improve its asset utilization.
Yue Yuen said it will continue to maintain its market leading position in the core footwear manufacturing operations maximizing shareholders value and returns.