PETALING JAYA: Sime Darby Bhd’s indirect wholly-owned subsidiary Sime Darby Overseas (HK) Limited (SDOHK) has entered into share sale agreements with China’s SPG Bohaiwan Port Group Company Limited to divest its Weifang Port companies for RMB1.92 billion (RM1.27 billion), marking its full exit from the non-core ports business.
In addition to the RMB1.92 billion, SDOHK will receive RMB541 million (RM357 million) as repayment of shareholder loans. The proceeds from the sale will be utilised for future investments in the group’s core businesses in the industrial and motors sectors, for capital expenditure and/or the repayment of short-term borrowings.
In recent years, Sime Darby has been divesting non-core assets to streamline portfolio and redeploy capital to support the growth of its core businesses. Other divestments include the disposal of a water management business in Weifang, interests in Tesco Malaysia, Eastern & Oriental Bhd and three river ports in Jining.
Sime Darby group CEO Datuk Jeffri Salim Davidson (pix) said the last few years have been a challenge for the ports business.
“China remains one of our most important markets contributing almost 40% of revenue for the group. The industrial and motors businesses there span across 120 locations and 14 provinces. We look forward to channelling the proceeds we receive from this divestment into expanding and strengthening our position in the industrial and automotive sectors in China, as well as continue to scope for opportunities in other markets,” he said in a statement today.
The deals are expected to be completed by the fourth quarter of 2022.
SPG Bohaiwan Port Group is part of Shandong Port Group Co incorporated by the Shandong provincial government to consolidate port assets in the province.
