MUI to sell 69% stake in PMH for RM77.1M

PETALING JAYA: Malayan United Industries Bhd (MUI) is planning to sell its 69.192% equity stake in Pan Malaysia Holdings Bhd (PMH) to Datuk Dr Yu Kuan Chon for RM77.124 million cash or 12 sen per share, in a move to divest its non-core assets and reduce its bank borrowings.
MUI said its six subsidiaries, namely Acquiline Sdn Bhd, Loyal Design Sdn Bhd, Malayan United Management Sdn Bhd, MUI Media Ltd, MUI Property Services Sdn Bhd and Megawise Sdn Bhd, had signed a share sale agreement with Yu to sell 642.7 million shares in PM Holdings.
"About RM60 million of the proceeds will be used to repay MUI's bank borrowings, while the balance will be for other working capital purposes," it said in a filing with Bursa Malaysia last Friday.
"The proposed disposal is in line with MUI's business strategy of divesting non-core assets," it said, adding that the disposal was also in line with the company's continuing efforts to reduce its level of bank borrowings.
MUI said the proposed disposal was expected to reduce its total borrowings to RM890.54 million from RM970.32 million as at Dec 31, 2013.
"About RM60 million of the proceeds will be used to repay MUI's bank borrowings while the balance will be for other working capital purposes. The estimate timeframe for the utilisation of the proceeds is 12 months upon the completion," it said.
The company said the expected gain from the disposal would be about RM40 million, based on the latest audited financial statements of MUI for the financial year ended Dec 31, 2013, assuming that the proposed disposal had been effected on Dec 31, 2013.
"Barring any unforeseen circumstances, the proposed disposal is expected to be completed within three months from the date of signing of the shares sale agreement," MUI said.