DRB-Hicom shares rise 4.02%, on active trade on news of Alam Flora sale

PETALING JAYA: Shares of DRB-Hicom Bhd and Malakoff Corp Bhd were on active trade this morning after the former announced that it is selling Alam Flora Sdn Bhd to the latter for RM944.6 million.
At midday, DRB-Hicom’s share price rose 4.02% or 9 sen to RM2.33 with 16.07 million shares traded, making it one of the top gainers during the morning session.
Meanwhile, Malakoff’s share price fell 6.73% or 7 sen to 97 sen with 19.31 million shares traded. It was one of the top losers during morning trade.
Yesterday, DRB-Hicom said it is selling Alam Flora to Malakoff’s dormant unit Tunas Pancar Sdn Bhd to pay off loans and finance loss-making Proton Holdings Bhd’s operations.
The profitable Alam Flora holds a 22-year concession for solid waste collection and public cleansing management awarded by the government, which runs through Sept 1, 2011 until Sept 1, 2033.
The deal comes with a commitment from DRB-Hicom to cover a shortfall of up to RM140 million, over a two-year period, in the profit before tax of Alam Flora, should there be any tariff reduction of the concession agreement within 24 months of the sale to Tunas Pancar.