PETALING JAYA: Malakoff Corp Bhd has completed the acquisition of a 97.37% stake in Alam Flora Sdn Bhd from DRB-Hicom with a lower price tag of RM869 million.
This represents a discount of 8% from RM944.61 million, after taking into consideration the revised independent discounted cashflow valuation range of between RM796 million and RM893 million, according to Malakoff’s filing with the stock exchange.
“The price revision does not exceed the adjustment limit of RM92.4 million as provided in the share sale agreement,”
On Aug 1, 2018, DRB-Hicom said it was 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.
Alam Flora holds a 22-year concession for solid waste collection and public cleansing management awarded by the Malaysian 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 in the concession agreement within 24 months of the sale.
DRB-Hicom intends to use RM500 million from the proceeds of the sale to pay off Islamic medium-term notes and term loans, while the remaining RM44.6 million will be for Proton’s development costs for new models as well as any future investment opportunities to be identified.
