PCCS buys additional 15% stake in Southern Auto Capital

KUALA LUMPUR: PCCS Group Bhd has acquired an additional 18.8 million shares, or 15% equity interest in Southern Auto Capital Sdn Bhd (SAC), a subsidiary of the company for RM18mil.

In a filing with Bursa Malaysia, PCCS said the subscription would increase PCCS's equity participation from four million shares to 22.8 million shares, representing 95% of the total issued share capital of SAC.

“This move enables SAC to raise funds without incurring interest costs associated with bank borrowings and strengthens its financial position by enhancing shareholders' funds and reducing gearing levels. Ultimately, this will contribute positively to the future years' PCCS credit and financing segment profit,” it said.

PCCS said the subscription of additional shares arrived after considering the business loan size of RM35mil, the audited net tangible asset of SAC of RM6mil as of March 31 and SAC’s existing banking facilities.