PETALING JAYA: Vertice Bhd is divesting its 60% equity interest in fashion retail business Kumpulan Voir Sdn Bhd to its executive deputy chairman Seow Khim Soon for RM32.62 million cash.
In a filing with Bursa Malaysia, Vertice said it has entered into a conditional sale and purchase agreement (SPA) with Seow for the proposed divestment. Vertice currently holds 100% stake in Kumpulan Voir.
Upon completion of the proposed disposal, Kumpulan Voir will become Vertice’s 40% associated company. Kumpulan Voir has an issued share capital of RM3.06 million, comprising 3.065 million ordinary shares as at the latest practicable date of the announcement.
Incorporated on April 14, 1988, the retail outfit is primarily involved in property, investment holdings, designing, branding, ladies’ apparels, footwear and accessories.
Vertice said the divestment is line with its strategic move to reallocate its financial resources, of which proceeds from the disposal will be utilised to fund the expansion of its construction division.
“Additionally, stiff competition from international and locally established brands in the market, higher operating costs, as well as consumers’ ever-evolving taste and preference had impacted the retail business further.
“This initiated Vertice to streamline and rationalise its retail division that involved the closure of seven non-profitable outlets and counters that were not performing well last year,” it said in a statement today.
Seow has indicated plans to relinquish his position as executive deputy chairman of Vertice upon completion of the proposed disposal, to focus on managing the fashion retail business.
According to Vertice, his resignation from Vertice is also to discharge him from any potential conflicts of interest, arising from his existing directorships in both Vertice and Kumpulan Voir.
The RM32.62 million consideration was arrived at after taking into consideration the consolidated net assets of Kumpulan Voir of RM54.36 million as at Sept 30, 2018. The group said there will not be any material gain or loss on disposal to be recognised.
The proposed disposal, which is expected to be completed in the first quarter of 2019, is subject to approvals from the shareholders at an EGM to be convened and any other relevant authorities if required.
Moving forward, Vertice will focus on the construction division which it believes has huge potential and better prospects.
“Since we diversified into the construction business, we have grown by leaps and bounds, and have bagged several major infrastructure projects, notably the Penang Mega Infrastructure Package 2 project worth RM815 million.
“With a strong order book in hand and net cash position status, we are optimistic of the growth prospects in the future and are well poised to bid for valuable projects that will provide more earnings visibility in the coming years,” it added.
Vertice’s share price closed unchanged at 90 sen today with 15,400 shares done.
