DNEX and CGP Fund to acquire 100% stake in Khazanah's SilTerra

The SilTerra Malaysia plant in Kulim Hi-Tech Park in Kedah.

KUALA LUMPUR: Dagang Nexchange Bhd (DNeX) and Beijing Integrated Circuit Advanced Manufacturing and High-End Equipment Equity Investment Fund Centre (CGP Fund) have signed a share sale and purchase agreement with Khazanah Nasional Bhd.

The agreement involved a proposed acquisition of 100 per cent stake in SilTerra Malaysia Sdn Bhd for RM273 million.

In a filing with Bursa Malaysia today, DNeX said it would acquire 60 per cent equity interest in SilTerra while CGP Fund would acquire the balance of 40 per cent equity interest.

"The purchase consideration for DNeX’s 60 per cent stake will amount to about RM163.8 million which will be funded through a combination of proceeds to be raised from a proposed private placement, internally generated funds and/or borrowings.

"The acquisition is expected to be completed by the end of the second quarter of 2021 with the capital injection expected to be within 180 days thereafter,” it said.

DNeX and CGP Fund have also committed to a capital injection of RM200 million by way of subscribing for new ordinary shares to be allotted and issued by SilTerra.

"From the capital injection, approximately RM150 million will be mainly utilised as capital expenditure to upgrade SilTerra’s equipment and manufacturing capabilities in new technologies with the remaining allocated for working capital,” it said.

Based on DNeX’s 60 per cent equity stake, the capital injection by the company will amount to approximately RM120 million.

DNeX's group managing director Datuk Seri Syed Zainal Abidin Syed Mohamed Tahir said the company planned to optimise existing operations and management of resources in adapting to the new businesses with its partner CGP Fund.

"The partnership will also act as a bridge bringing in an established ecosystem of international technology players to nurture Malaysian, local content to serve the global market,” he said.

He said the acquisition is part of DNeX’s expansion and diversification plan.

"Being in the manufacturing industry, the consolidation of SilTerra’s financial performance, which is in the form of recurring income from its manufacturing contracts will complement DNeX existing earnings,” he added. - Bernama