Mieco to buy back Great Platform from SYF Resources

PETALING JAYA: Mieco Chipboard Bhd plans to take over Great Platform Sdn Bhd from its holding company SYF Resources Bhd for RM58.59 milllion, a move which will enable it to enlarge its production lines of particleboards with the addition of two existing plants.
The total amount payable by Mieco to SYF comprises RM7.06 million in purchase consideration, while the remaining RM51.53 million is Great Platform’s liabilities consisting of payment owing to SYF.
“As at April 30, 2017, there was an outstanding amount of approximately RM51.53 million owing by Great Platform to SYF due to the advances made by SYF, being the holding company of Great Platform to fund the past expansion of its business operations which include, amongst others, capital expenditures for the production machinery and working capital expenses required for the business operations,”Mieco’s board explained.
SYF on its part said in a Bursa Malaysia filing, the disposal of Great Platform will enable it to re-strategise its financial and capital resources and improve its financial position and liquidity on the backdrop of tough economic conditions. Proceeds of the disposal will provide it with future cash flow to be used for working capital, reduce its borrowings or to acquire land banks.
“The company is of view that the boards business requires a bigger platform, specialised skills and increased management focus than the SYF Group can provide it to grow effectively, and wishes to exit this business to focus its resources and capital for allocation to its other core businesses.The board believes that Mieco, having established a foothold in the particle board business in Malaysia, is well placed over the medium to long term to maximise the potential value of Great Platform, as part of its broader particle board and melamine faced board offerings,” SYF’s board said.
An EGM will convened to seek shareholders approval for the acquisition.
Mieco’s shares were up 0.55% to 92 sen with some 2.09 million shares changing hands. SYF’s shares were down 1.87% to 52.5 sen with 542,000 shares changing hands.