KUALA LUMPUR: OM Holdings Ltd's subsidiary OM Materials (S) Pte Ltd has entered into a deal with Samalaju Industries Sdn Bhd, a unit of Cahya Mata Sarawak Bhd, that will see the latter exit its investment in the ferrosilicon and manganese alloy smelting complex in Samalaju Industrial Park in Sarawak.
In separate filings with Bursa Malaysia, OM Holdings and Cahya Mata Sarawak said they have inked a binding letter of offer for the latter to sell its entire equity interest in OM Materials (Sarawak) Sdn Bhd and OM Materials (Samalaju) Sdn Bhd to OM Holdings for US$120mil (RM520.72mil).
Accordingly, OM Holdings, a manganese and silicon metals group, would increase its stake in the target companies to 100% from the current 75% while construction group Cahya Mata Sarawak would exit the companies.
"The acquisition is advantageous to the OMH Group and its strategy of investing further in ferroalloy smelting, building organically on the success of the OM Sarawak smelter facility," said OM Holdings in a statement.
Under the terms of the agreement, OM Materials will purchase 165.59 million shares and 43.69 million irredeemable convertible preference shares in OM Sarawak, representing 25% of the issued and paid up share capital and preference share capital in the company.
It will also purchase 32.08 million shares in OM Samalaju, representing 25% of the issued and paid up share capital of the company.
OM Holdings said it intends to fund the purchase through a combination of existing cash reserves, future operating cash flows, bank borrowings and equity raising in the second half of 2022.
“We appreciate the past contributions by our partner, Cahya Mata Sarawak Bhd, to the Sarawak Project.
"Together with our recent secondary listing in Bursa, Malaysia, this transaction marks a key milestone in our journey and complements the wider OMH strategy of growing our Sarawak smelter and becoming the leading supplier of ferroalloys globally – building significant value for all shareholders," said OM Holdings executive chairman and CEO Low Ngee Tong.
Trading in the shares of OM Holdings was halted from 9am to 10am today in light of the announcement.
As at 10.30am, shares in OM Holdings were up 13 sen or 4.73% to RM2.88 each on the back of 48,200 shares traded while Cahya Mata Sarawak rose six sen or 5.61% to RM1.13 apiece with 2.8 million units exchanging hands.