KUALA LUMPUR: Berjaya Corp Bhd’s (BCorp) subsidiary, Berjaya Group Bhd (BGroup) has entered into a Share Sale Agreement with Naza Corporation Holdings Sdn Bhd to dispose 100% equity interest in Berjaya Enviro Holdings Sdn Bhd (BEnviro) for RM700 million.
The agreement was signed by Berjaya Corp joint group CEO Vivienne Cheng and Naza Corp group MD Tan Sri Ismee Ismail today.
Commenting on the proposed disposal, Vivienne Cheng said that the selling of BEnviro will generate substantial financial returns from Berjaya’s investments in BEnviro where the gains will enhance the net assets and the utilisation of the proceeds is expected to contribute positively to the future earnings of the BCorp Group.
“The proposed disposal provides an opportunity for the BCorp Group to monetise its investment in BEnviro with an estimated gain of approximately RM490.74 million,” she told a press conference after the agreement signing.
She stated that the proposed disposal is expected to improve the earnings, net assets and the gearing of the BCorp Group significantly.
“If you look at how we are going to spend the RM490 million, it is to reduce our gearing. In this current market, with interest rates going up substantially, having this cost-saving is a positive move for Berjaya going forward. It actually translates to about a 30% saving for the group,” she said.
Upon the completion of the proposed disposal, both BGroup and BEnviro will set up a joint venture company to collaborate in all new projects including but not limited to sanitary landfills, environmental and waste management in Malaysia and overseas, in which, BGroup and BEnviro shall own 49% and 51% respectively.
“The decision to divest BEnviro was made after careful consideration and analysis of the current market conditions and strategic goals of the BCorp Group,“ Vivienne said.
In a separate statement, Naza’s group executive chairman SM Nasarudin SM Nasimuddin said that through this proposed acquisition, Naza aims to benefit from the extensive operational infrastructure, technological advancements, and talented workforce of BEnviro and its seven subsidiaries.
He said that Naza is targeting to retain the management and talent of these entities for business continuity.
“This acquisition reinforces Naza’s dedication towards strategic growth of its business reach (by) venturing into the provision of comprehensive waste management solutions and promoting environmental sustainability.
“The group has been exploring new sectors that align with its vision of sustainable development, resource efficiency, and upholding the highest standards of environmental stewardship,“ he said.
He said that waste management, a crucial aspect of the green economy with sizeable growth potential, perfectly aligns with the company’s vision.
“Waste management businesses have predictable, steady income streams and the industry is non-cyclical in nature, both of which are key considerations for this acquisition,“ he added.
The BEnviro Group is involved in the environmental business segments of solid waste management with engineered sanitary landfill, landfill gas management via renewable energy generation from landfill gas, as well as scheduled waste management through recycling, treatment and disposal. BEnviro’s waste management projects include the Bukit Tagar Sanitary landfill in Selangor.
