COURTS Mammoth Bhd said its has entered into a preliminary agreement to buy 94.99% of Indonesia's PT Matahari Courts (PTMC) together with promissory notes owned by sister company Courts Overseas Ltd for RM47.48mil.
Courts plc controls 55% of Courts Mammoth and 100% of Courts Overseas.
PTMC trades under the “Courts” brand and is an established retailer of electronic and electrical goods and appliances and home furnishings in Indonesia.
In a statement, Courts Mammoth said the proposed acquisition, which will be financed via internally generated funds will allow it to diversify its market reach to other geographical regions with a view to becoming a major regional retailer of furniture and electrical goods.
Apart from increasing revenue and expanding its source of income, Courts Mammoth said the proposed acquisition would provide it with an immediate access into the Indonesian retail market and enable it to maximise the potential of PTMC's established retail network in Indonesia.
Courts Mammoth also said that the investment would allow it to continue creating further economic benefits in Malaysia and Indonesia particularly in terms of increased employment, supplier and third party service provider opportunities.
“The potential return on investment from the proposed acquisition may be higher than the interest yield of the cash deposits earned by the company which was at an average yield of 3.4% per annum in the last financial year, “ it added.
Courts Mammoth also said it may consider listing PTMC on the Main Board of the Jakarta Stock Exchange at an appropriate time to further enhance shareholders return from the proposed investment. - AFX