PETALING JAYA: The Star Media Group (SMG) has called for an EGM on May 31, to seek shareholders approval to take a 13% substantial stake in plantation company Matang Bhd
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The EGM will be held virtually and upon approval by shareholders, SMG will get the nod to receive 357 million new shares in Matang issued at an issue price of 8.09 sen per share, as well as a cash payment of RM4.12mil.
That payment will be for SMG selling property assets for RM33mil to Matang, which will see an allotment and issuance of its shares to SMG and, SMG is expected to hold 13% of the total enlarged number of shares in Matang after such issuance.
It is also estimated to realise a net pro-forma gain of about RM15.6mil from the disposal.
Matang is buying property assets from SMG as part of its plan to diversify its business into property investment.
It released a notice last Friday on Bursa Malaysia to convene an EGM on May 31 to get shareholders approval for its acquisition.
In February, Matang inked an agreement with SMG’s wholly owned subsidiary SMG Land Sdn Bhd to acquire two units of double-storey semi-detached factory and warehouse annexed with a one-and-a-half-storey office building and other ancillary buildings – which is located within the Star Business Hub in Bukit Jelutong, Shah Alam.
This exercise is deemed as a related- party transaction as MCA is a common major shareholder in both groups.
MCA holds an indirect stake of 17.15% in Matang; and a direct stake of 43.23% in SMG.
As part of its plan, SMG has now ventured into the plantation sector after making its presence in the property sector three months ago.
Matang, which operates primarily through its oil palm business, said in a bourse filing in February that the property investment business may contribute about 25% of its net profit.
Its net profit for the financial year ended June 30, 2022 (FY22) rose to RM5.7mil from RM4.1mil in FY21 as revenue grew to RM17.6mil from RM13.7mil.
For 1Q23, the group registered a net profit of RM2.1mil on a revenue of RM4.7mil.
The proposals, if approved, are expected to be completed by the second quarter of 2023.
Matang Estate is made up of 45 contiguous pieces of agricultural land located in Ledang and Segamat, Johor, with a total land area of 1,094.15ha, where Matang’s oil palm plantation operations are located.
It also owns an investment property comprising three blocks of industrial buildings with total lettable areas of about 149,000 sq ft in Larkin, Johor Baru.
