KUALA LUMPUR (April 18): China-based fabric manufacturer Sinotop Holdings Bhd wants to dispose of an indirect 35.625% equity stake in Suzhou Xuande Zhifu Yihe Investment Management Co Ltd Equity Investment Centre (Limited Partnership) (Xuande) at cost, as the investment failed to provide returns.

In a filing to Bursa Malaysia today, Sinotop said its indirect wholly-owned subsidiary Top Textile (Suzhou) Co Ltd has entered into an agreement with Beijing Zhifu Yihe Investment Management Co Ltd for the sale of the stake for 23.06 million renminbi (RM14.77 million).

Xuande is involved in equity investment, investment management and consultation services.

"The proceeds arising from the disposal shall be utilised for working capital for the existing business operations of Sinotop Group within the current financial year ending Dec 31, 2017," said the group.

Sinotop said it had decided to dispose of the stake as the investment has yet to provide any return and has not generated any income since the group's initial investment in 2011.

"In view of this, the board is of the opinion that the disposal provides an opportunity for Sinotop group to monetise its investment capital in Xuande by disposing (of) the sale shares to the purchaser.

"The disposal enables Sinotop group to recover the original cost of investment of the group in Xuande, (from) which the cash proceeds from the disposal would be utilised as working capital for the existing business operations of the group," said Sinotop.

Sinotop's share price closed down 0.5 sen or 0.69% at 72 sen, giving it a market capitalisation of RM284.33 million.