Tat Hong Holdings announced that it has divested its 31.3% stake, comprising 73.1 million shares, in Kian Ho Bearings to Raffles United in a married deal.

Kian Ho is listed on the Mainboard and is the stockist, distributor and retailer of bearings, seals and power transmission belts in Southeast Asia. Tat Hong acquired Kian Ho shares in 2006 to ride on synergies between both businesses. The synergies, however, did not materialise.

The divestment is worth $17.2 million, or 23.5 cents a share, a premium of 6.8% to the last traded price of 22 cents on June 3. Tat Hong will re-invest the proceeds from the divestment to working capital or to pay off bank loans. The acquisition has boosted Raffles United’s stake in Kian Ho to 52.7%, triggering a mandatory unconditional for Kian Ho.