KUALA LUMPUR: Kulim (M) Bhd is selling its entire 91.38% stake in loss-making Natural Oleochemicals Sdn Bhd (NatOleo) to PGEO Group Sdn Bhd, a subsidiary of Singapore-listed Wilmar International Ltd, for RM450mil.
Kulim said the disposal would provide the company with an exit strategy to unlock the value of its investment in NatOleo.
“The proposed disposal allows Kulim to focus more attention on its more profitable businesses, i.e. oil palm plantation operations and quick service restaurants,” it told Bursa Malaysia yesterday.
Based on NatOleo’s latest audited consolidated financial statements for the year ended Dec 31, 2009, the group incurred a net loss of RM22.97mil on revenue of RM1.1bil.
As at Dec 31, net assets attributable to NatOleo’s shareholders amounted to RM308.2mil. Kulim’s original investment in NatOleo as at July 20, 1994 was RM194.3mil.
NatOleo, one of the country’s largest oleochemical players, manufactures and exports oleochemical products such as fatty acids, its fractions and glycerine.
Kulim said the stake disposal would provide immediate cash proceeds that would be used for future investment and/or working capital purposes.
“Should the proceeds be re-invested in high profit-yielding assets, these investments may yield better returns to Kulim compared with the earnings foregone arising from the proposed disposal,” it said.
Upon completion of the disposal, Kulim said it expected to record a gain of about RM168.3mil, or about 54 sen per share.
It also said the disposal, which would be fully satisfied in cash, would not have any effect on its issued and paid-up capital.
Wilmar, which is linked to low-profile Malaysian tycoon Tan Sri Robert Kuok, ranks among the largest listed companies by market capitalisation on the Singapore stock exchange.
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