k1 Ventures is selling its controlling stake in North America's largest independent rail-carriage leasing company for a fraction of the price it had paid.
k1 and its wholly-owned subsidiary, Focus Up Holdings, have entered into a definitive agreement to sell its effective 80.1 per cent stake in Long Haul Holding Corp (Helm) to Wells Fargo Bank for about US$152 million (S$192 million).
k1 forked out US$472 million for Helm in July 2005.
At the time, Helm owned a fleet of 795 locomotives and almost 20,000 rail cars, directly or through joint ventures.
It reported pre-tax earnings of US$70.4 million for the year ended March 31, 2005.
In a statement on Feb 21, k1 said the sale is part of a proactive management of its investments with the aim of enhancing shareholder value.
The transaction is expected to be completed during the second quarter.
Based on k1 group's unaudited consolidated financial statements for the second quarter ended Dec 31, the book value and the net tangible asset value of the Helm stake, excluding non-controlling interests, was some $129 million and $37 million, respectively.
The disposal is not expected to have any material impact on k1's earnings per share for the year ending June 30.
But it should increase net tangible assets per share by about seven cents.