YTL Cement Bhd is buying the remaining 50% equity interest in Pahang Cement Sdn Bhd that it does not already own from Perbadanan Setiausaha Kerajaan Pahang (PSKP) and Pasdec Corp Bhd for a total of RM138mil.
As provided in the sale and purchase agreement signed by the parties yesterday, the purchase consideration for the Pahang Cement stake will be satisfied by the issuance of 36.8 million new ordinary RM1 shares in YTL Cement at an issue price of RM3.75 each.
This will result in the Pahang government, through Pasdec and PSKP, gaining an equity interest of about 20% in YTL Cement.
YTL Cement managing director Tan Sri Francis Yeoh Sock Ping said the company's acquisition of the rest of Pahang Cement to make it a wholly-owned subsidiary was in line with the consolidating trend in the cement industry.
Even if companies do not merge, there should be strategic alliances, he said at a press conference after the sale and purchase agreement was signed in Kuala Lumpur in the presence of Pahang Mentri Besar Datuk Seri Adnan Yaakob.
Pahang Cement was established in 1995 as a 50:50 joint venture between Pahang government and YTL Cement. The Pahang government's participation in the venture was through Pasdec, which was at the time a state-owned entity, and PSKP.
The purpose of the joint venture was to build and operate an integrated cement plant in Bukit Sagu, Kuantan. The plant, the first of its kind in the eastern corridor, became operational in May 1998.
On the collaboration between YTL Cement and the Pahang government, Yeoh said: Pahang Cement is a testimony to the success of public and private sector cooperation, where each party's strengths have been harnessed through intelligent partnership.
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