DIVERSIFIED conglomerate PPB Group Bhd
is proposing to take its 54%-owned subsidiary FFM Bhd, the country's largest flour miller, private via a share swap and cash payment.
Under the proposed privatisation scheme, every one existing FFM share will be entitled to one new PPB Group share and RM2 cash.
Shares of PPB Group and FFM were last traded at RM6 and RM6.95 respectively before they were suspended last Friday.
In a statement to the KLSE yesterday, PPB Group said it would acquire the remaining 102.13 million FFM shares representing nearly 46% of the company it did not hold via the issue of 102.13 million new PPB Group shares and a cash payment of RM204.3mil.
The cash would be sourced from bank borrowings and/or internally generated funds, the statement said.
PPB Group said its total borrowings would increase to RM665.6mil from RM461.4ml if the cash consideration for the privatisation exercise was financed entirely by bank loans.
And its share capital would be enlarged to RM592.7mil from RM490.6mil currently, while its net tangible assets per share would drop to RM5.39 from RM5.69.
PPB Group said the proposed privatisation of FFM would result in the creation of a stronger group of companies with pro forma shareholders' funds in excess of RM3.33bil and a broader income base.
Upon completion of the privatisation, FFM would become a wholly-owned subsidiary of PPB Group and its shares would be removed from the official list of the KLSE.
FFM is involved in flour milling, animal feed production, marketing of wheat, maize and soya beans, and palm oil refining.
PPB Group is the Malaysian flagship company of the Kuok family. PPB Oil Palm is the other listed entity in the group, in which it holds a 56% stake.
The group has grown from being just a sugar cane cultivation and sugar refining operation into a conglomerate whose core activities include flour and feed milling, oil palm plantations, entertainment, property development, environmental engineering and waste management.
Its engineering arm, ChemQuest Sdn Bhd, has won a 20-year concession for a sewage treatment plant in the Chinese capital of Beijing, while wholly-owned unit Malayan Sugar Manufacturing Co Bhd holds a 20% stake in Malaysian Bulk Carriers Bhd, which is en route to a listing on the KLSE main board.
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