PETALING JAYA: Sime Darby Bhd could use RM93.5mil worth of proceeds from the sale of its remaining 10.89% stake in Eastern & Oriental (E&O) in various ways including a special dividend to its shareholders.
Following an email query from Bursa Malaysia, Sime Darby disclosed that it is open at this stage on the utilisation of the proceeds from the sale of its stake in E&O.
“All options remain open at this stage on the use of the proceeds.
“It may be utilised for capital expenditure, loan repayment, working capital, or special dividend, ” the group said.
Providing further justification to the bourse on the disposal, Sime Darby’s offer price of 60 sen per share, which it received on March 15, was at a premium of 29% to its last closing price of 46.5 sen per share on March 12.
The group also pointed out that the disposal would result in a reversal of impairment of around RM21mil based on the group’s carrying value of E&O as at Dec 31,2020.
“The highest percentage ratio is 0.62%, based on the ratio of the aggregate value of the consideration received compared to the net assets of Sime Darby, ” it explained.
Last week, E&O announced that one of its directors, Datuk Tee Eng Hong has made a conditional mandatory general offer to buy out minority shareholders in the company for 60 sen a share.
This is after Tee, through his private investment vehicle Amazing Parade Sdn Bhd acquired an additional 10.89% stake in the company from Sime Darby for RM93.5mil.
The purchase raised Amazing Parade’s equity interest in E&O to 31.82%.
Together with other parties acting in concert, the offeror’s stake in E&O has increased to 42.71%, triggering a conditional mandatory takeover offer.
Sime Darby said the stake disposal was in line with the group’s ongoing non-core asset rationalisation exercise.
Sime Darby’s shares gained three sen to close at RM2.45 yesterday on a volume of 9.22 million shares.
Year-to-date, the counter has gained 6.1%.