The vehicle leather upholstery manufacturer said it had rescinded the proposed acquisition of 51% equity interest in Rentas Health to seek different methods of collaboration by entering into a Mutual Rescission and Release Agreement with the latter.
As such, the Sales & Purchase Agreement dated Aug 2, 2021, would be terminated with immediate effect.
The group said its proposed diversification into healthcare will not be pursued at this juncture, in consideration that its existing healthcare related business is not expected to divert 25% or more of the net assets or net profit of the group
"However, Pecca will continue to monitor the contribution of its healthcare related business, which currently is mainly the manufacturing of medical-grade face masks, and make necessary announcements to Bursa Securities as and when new businesses or contracts have been identified," it said in a Tuesday statement.
In the same statement, Pecca group managing director Datuk Teoh Hwa Cheng said a business diversification plan remains a positive move to avoid the group from being solely reliant on a single segment.
"It is our outmost priority to seek for income sources apart from automotive segment, and we shall seek for more mutually beneficial ways to work with our partners in this business venture.
"As and when any new opportunities arise, the Board will also seek necessary approval from shareholders if the nature of the transaction requires it," he said.
As at June 30, 2021, Pecca holds cash and cash equivalent of RM78.13mil and zero borrowings.
It said it plans to utilise the cash through value-accretive efforts and seek suitable merger and acquisitions or joint-venture opportunities to enhance the earnings visibility of the group going forward.