It said on Monday the proposed disposal would allow the group to achieve two main corporate objectives, namely:
(i) to unlock value and monetise its investments in F&B Nutrition, recognise a gain on disposal of between RM610.8mil to RM810.8mil and use the gross proceeds to pare down the group’s bank borrowing;
(ii) to streamline its business operations and focus on its general packaging business.
Can-One said that it had last Friday entered into a definitive sale and purchase agreement with Wholesome Dairies Pte Ltd, the holding company of Asia Dairy Creations Sdn Bhd, for the proposed disposal of F&B Nutrition for between RM800mil and RM1bil.
Can-One said upon completion of the proposed disposal, the group will continue to be involved in general packaging - the manufacture of metal and lithographed tin cans, plastic jerry cans, rigid packaging, aluminium cans and corrugated fibreboard cartons; and also contract manufacturing - the manufacture, packaging and distribution of carbonated and non-carbonated beverages, milk powder as well as edible oil products.
“In pursuit of its long term objective of evolving into a market leader in the can manufacturing industry, the Company intends to shift its focus to its general packaging segment, the prospects of which have improved significantly through the privatisation of KJCFB.
“KJCFB is principally involved in the manufacturing and distribution of tin cans and aluminium cans in Malaysia and regional markets such as Vietnam, Singapore and Myanmar.
“Through KJCFB, the group will be able to expand its range of products to include two-piece aluminium cans and corrugated box packaging thus enabling it to become a total service provider of cans and packaging products to its customers,” it said.
Can-One would use the funds to pare down RM750mil in bank borrowings would result in estimated gross interest savings of approximately RM38.3mil per annum and improve the group’s gearing.