PETALING JAYA: Bio Osmo Bhd will exit its loss-making bottled drinking water business following the disposal of its wholly owned subsidiary Amshore Holdings Sdn Bhd for RM2.5mil.
The Main Market-listed company told Bursa Malaysia that it had signed an agreement to sell its 100% stake in Amshore to Start Sphere Sdn Bhd.
The proposed divestment was to allow Bio Osmo to focus entirely on its new hospitality business, which includes the management and operation of hotels and resorts, property investment as well as hotel development.
“The bottled drinking water division has been historically registering net losses and in view of the continuous pricing squeeze and rising production costs, and at the same time affected by capacity constraint, the proposed disposal will allow the group to effectively exit from its loss-making bottled drinking water business as well as curtailing further losses in the future.”
Bio Osmo said the board is not expecting any material financial or operational impact from the proposed disposal on Bio Osmo.
Half of the RM2.5mil proceeds from the disposal will be utilised for Bio Osmo’s future working capital.
Another RM1mil will be used for some of the estimated expenses related to the ongoing acquisition of Impiana Group’s hotel assets.
The remaining RM50,000 will be allocated to defray the expenses related to the sale of Amshore.
The corporate exercises involving the Amshore disposal and the acquisition of Impiana Group’s hotel assets are expected to be completed by year-end.
“Upon completion of the proposed disposal, the Bio Osmo group shall derive its income solely from the hospitality business.
“The proposed disposal is not expected to have any material impact on the group’s earnings per share,” it said.