Proposed disposal of MUI’s stake in PMH to Dr Yu terminated

PMH is the operator of Corus Paradise Resort Port Dickson.

KUALA LUMPUR: Malayan United Industries Bhd (MUI) and Datuk Dr Yu Kuan Chon have terminated their agreement for the proposed disposal of the MUI group’s 69.19% equity interest in Pan Malaysia Holdings Bhd (PMH) to the YNH Property Bhd chairman and executive director.

In a filing with Bursa Malaysia on Tuesday, MUI said the proposed RM77.12mil sale was cancelled due to the non-fulfillment of a condition precedent for the deal by the cut-off date of Sept 12.

PMH is the operator of Corus Paradise Resort Port Dickson and is also involved in financial services through associate Pan Malaysia Capital Bhd (PM Capital).

The proposed disposal was originally expected to be completed within three months of the signing of the shares sale agreement on Dec 12, 2014. However, the cut-off date was subsequently extended several times.

In May last year, the Securities Commission (SC) had through its letter to PM Securities Sdn Bhd (PMS), a subsidiary of PM Capital, rejected PMS’s application for change of controlling shareholder.

In an announcement to Bursa Malaysia in March, MUI said PMS had again submitted an application to the SC for change of new controlling shareholder and was still awaiting the outcome of the application.

The original cost of investment in the sale shares totalled RM1.297bil, but MUI stood to gain an estimated RM40mil from the disposal.

The proposed disposal of the loss-making PMH group was in line with MUI’s business strategy of divesting non-core assets and it was also in line with the company’s continuing efforts to reduce its borrowings. Most of the expected proceeds -- RM60mil -- was to be used to repay MUI’s bank borrowings.