APWCC to Sell Specific Share in Joint Venture with Shandong Pacific Fibre Optic

Asia Pacific Wire & Cable (APWCC), which specializes in wires and cable manufacturing has agreed to sell its 51% stake in the joint venture (JV) with fibre optic manufacturer Shandong Pacific Fibre Optic (SPFO) under certain agreed stipulations.

APWCC has decided to sell off its stake in the JV to a group of investors in an all cash deal of RMB 18.5 million i.e. $US 2.9 million. The sale would be completed in the event of completion of buyer’s verification of the sale details and procurement of local government clearances, which APWCC believes will take anywhere between 30 to 60 days. Subsequent to the completion of the above pre-requisites, APWCC will be relieved of its commitments in relation to the joint venture with SPFO inclusive of any lease bonds.

APWCC’s board has sought this move to retain focus in its core wire and cable business contributing to enhancing the shareholder’s interests. APWCC have agreed with the sales terms with its buyers. SPFO being large in Shandong province contributes to this over- supply. APWCC felt that such over-supply inhibits the opportunity of sustainable development of its core wire and cable business. The fibre optic cable business is controlled by a few major firms covering over 80% of the market in entire China. Given such a scenario in the market, APWCC was unable to allocate its resources in the fibre optic domain owing to this saturation of the market by a few players. Secondly, the access to raw materials by SPFO at competitive prices plus the consolidation plan of the Fibre Optic industry by the Chinese government have also been active contributors.