Classic Scenic to acquire 51% stake in Redina


PETALING JAYA: Classic Scenic Bhd, a wooden picture frame mouldings manufacturer and exporter in Malaysia, has proposed to acquire 51% equity interest in Redina Malaysia Sdn Bhd.

With this, the company will diversify into the retail sector encompassing apparel and food and beverage (F&B), eventually.

Redina is an importer, general merchant and dealer in shoes, clothing and undergarments.

“The proposed diversification into the apparel and F&B sector is a strategic initiative aimed at broadening our income streams by identifying and engaging in new viable businesses, thereby reducing dependence on the existing wood-based business. “The proposed diversification is expected to have a positive impact on the group’s financial performance,” said Classic Scenic’s managing director Eric Vo.

The company will buy the stake from Perdanis Distribution (M) Sdn Bhd to acquire 51% equity interest in Redina for a total consideration of RM35.7mil that will be satisfied entirely in cash.

It had also announced a proposed 30% private placement and changed its company name from Classic Scenic Bhd to Hextar Retail Bhd. The proposed acquisition will be executed in two tranches, the company said in a statement.

The first tranche is a 20% equity interest in Redina that will be acquired for a total purchase consideration of RM14mil and will be funded using proceeds raised from the proposed 30% private placement.

The second tranche covering the remaining 31% equity interest in Redina, will be acquired for a total purchase consideration of RM21.7mil and will be funded through internally generated funds and bank borrowings.

The proposed private placement will entail the issuance of 113.8 million new shares, representing 30% of Classic Scenic’s existing issued shares, to independent investors with the issue price to be determined later.

“The purchase of Redina comes with a profit guarantee of RM12mil cumulatively for the period of two years from Jan 1, 2024 to Dec 31, 2025, providing the group with an additional income stream in the near term,” Vo said.

With an indicative placement price of 34 sen per share, the company said the proposed 30% private placement is expected to raise gross proceeds of approximately RM38.7mil.

From these proceeds obtained, the company intends to allocate RM23.9mil for F&B business expansion, RM14mil for the proposed acquisition of Redina and RM800,000 for the estimated expenses related to the proposals.

Follow us on our official WhatsApp channel for breaking news alerts and key updates!
   

Next In Business News

Nestle Malaysia names Wan Zulkiflee Wan Ariffin as new chairman
Ringgit likely to hit 4.20-4.40 against US dollar by year-end
P.A. Resources records highest ever quarterly revenue
Tropicana’s revenue jumps 60.7% to RM1.5bil in FY23
PETRONAS Gas net profit higher at RM1.82bil in FY23 on higher utilities, JV companies' contribution
UEM Sunrise reports revenue of RM1.3bil for FY2023
Ringgit strengthens against US dollar on positive market sentiment
Padini's 2Q net profit declines to RM53.10mil
TNB foresees steady performance in 2024
DC Healthcare expects growth boost from new branches

Others Also Read