Puncak Niaga disposes of loss-making China unit

PETALING JAYA: Puncak Niaga Holdings Bhd said the group is disposing of its loss-making unit in China held by its 98.65% subsidiary Sino Water Pte Ltd at zero cash consideration and a settlement sum of 10 million yuan (equivalent to about RM6.2 million).
Sino Water holds a 93.81% stake in Luwei, a water treatment and distribution company, while the remaining 6.19% stake is held by Environmental Holding Pte Ltd.
The original investment cost of Sino Water’s 93.81% stake in Luwei was RM27.5 million on Aug 19, 2008.
In a filing with the stock exchange last Friday, the group said the proposed transaction is only to be paid to Sino Water and its subsidiary, for repayment of the outstanding shareholder loans and outstanding consultancy service fees.
However, Puncak said the proposed disposal is subject to the successful filing and amendment of corporate registration with the relevant regulatory authorities of China.
The group said the proposed disposal will allow Sino Water to divest its loss-making subsidiary in China and to limit the group’s losses arising from this investment as Puncak intends to exit its business in China. It added that the proposed disposal will not have any material impact on the results, net assets per share or gearing of the group for the financial year ending Dec 31, 2016.
The proposed disposal is expected to be completed in the second quarter of 2017.