DRB-Hicom revamp of subsidiary companies in full swing

PETALING JAYA: DRB-Hicom Bhd yesterday announced that the group is embarking on an internal reorganisation within its subsidiary companies.

DRB-Hicom subsidiary PHN Industry Sdn Bhd has acquired 100% equity interest in Oriental Summit Industries Sdn Bhd, for RM23.9 million cash, from Hicom Holdings Bhd.

This is intended to streamline the common manufacturing activities of metal stamping, welding and sub-assembly of metal components for potential cost savings for the DRB-Hicom group, its board of directors said in a filing with the stock exchange.

PHN is a 62.5%-owned subsidiary company of Hicom Holdings with the remaining 37.5% equity interest held by Proton Holdings Bhd, both wholly owned subsidiary companies of DRB-Hicom.

Meanwhile, the group’s indirectly owned subsidiary Edaran Otomobil Nasional Bhd (EON) has entered into a share sale agreement (SSA) with DRB-Hicom EZ-Drive Sdn Bhd to dispose of its 100% stake in DRB-Hicom Leasing Sdn Bhd for RM14.9 million worth of shares in EZ-Drive.

Both DRB-Hicom Leasing and EZ-Drive are owned by EON and, upon completion of the internal reorganisation, DRB-Hicom Leasing will become a wholly owned subsidiary company of EZ-Drive.

“The Proposed Internal Reorganisation will enable EON to consolidate its vehicle rental and leasing business under one company to achieve greater operational efficiency and cost savings which will contribute positively to the DRB-Hicom group’s future earnings,” said the board of directors.

Similarly, EON has divested Multi Automotive Service and Assist Sdn Bhd (MASA) to Vikneswaran Suppiah, the operations manager of MASA, for RM1.With this, MASA ceases to be a subsidiary company of the DRB-HICOM group.

This, it said, is in line with the group’s intention to streamline its operations by divesting insignificant businesses and to focus on its core businesses. The deals will not impact the group’s earnings for the financial year ending July 31, 2017.