EON sells loss-making roadside assistance business

A picture shows the logo of auto maker Jeep in a cars dealer on January 12, 2017 in Saluzzo, near Turin. The United States on January 12, 2017 charged Fiat Chrysler with using software on its trucks to evade emissions standards on about 104,000 vehicles, an accusation the company immediately denied. The Environmental Protection Agency said the undisclosed software on the 2014 to 2016 models of Jeep Grand Cherokees and Dodge Ram 1500 trucks sold in the United States allowed the vehicles to emit more nitrogen oxides than permitted. / AFP PHOTO / MARCO BERTORELLO

KUALA LUMPUR: Edaran Otomobil Nasional Bhd (EON) is hiving off its emergency roadside assistance subsidiary, Multi Automotive Service and Assist Sdn Bhd (MASA), for RM1.

DRB-Hicom Bhd, which indirectly owns a 100% stake in the Proton and Jeep distributor and retailer, told Bursa Malaysia that EON’s proposed sale of MASA to Vikneswaran Suppiah was in line with the group’s plan to streamline its operations by divesting “insignificant” businesses and to focus on its core businesses.

MASA’s main activities are membership recruitment incorporating the provision of emergency roadside assistance and the supply of auto-related products and services.

The cash consideration of RM1 was arrived at based on willing buyer-willing seller.

Among others, EON took into account MASA’s unaudited shareholders’ deficit of RM180,000 as at Dec 31, 2016, and net loss of RM660,000 for the nine-month period ended Dec 31, 2016.

MASA’s audited shareholders’ funds as at March 31, 2016, was RM630,000 while its net profit for the financial year ended March 31, 2016, was RM170,000.

DRB-Hicom noted that EON had fully recovered its total cost of investment in MASA of RM425,000 via receipt of dividends from MASA.

In a separate filing, DRB-Hicom said it was undertaking an internal reorganisation whereby its unit PHN Industry Sdn Bhd had acquired 100% equity interest in Oriental Summit Industries Sdn Bhd for RM23.96mil from another wholly-owned subsidiary Hicom Holdings Bhd. Both PHN and Oriental Summit are involved in metal stamping, welding and sub-assembly of metal components.

Also as part of the reorganisation, EON has sold its 100% equity interest in passenger and commercial vehicle lessor DRB-Hicom Leasing Sdn Bhd to car rental unit DRB-Hicom EZ-Drive Sdn Bhd -- the franchise holder of the Avis brand in Malaysia -- for RM14.97mil to be satisfied with EZ-Drive shares.