MUI to sell significant stake in Pan Malaysia

PETALING JAYA: Malayan United Industries Bhd (MUI) is expected to make a loss of RM1.23mil from the proposed disposal of a significant portion of its stake in Pan Malaysia Holdings Bhd (PMHB) for a total consideration of RM36.73mil.

In its filings with Bursa Malaysia, the diversified group announced it had disposed of 612.12 million PMHB shares, representing approximately a 65.9% equity interest in the company to Exsim Hospitality Holdings Sdn Bhd. The exercise was completed yesterday through a direct business transaction.

Following the disposal, MUI said it would still own about 22.43 million shares, or an approximately 2.42% equity interest, in PMHB.

PMHB is principally an investment holding company, with its subsidiaries principally engaged in operating a hotel known as Corus Paradise Resort Port Dickson (CPRPD).

MUI said the disposal of its shares in PMHB was aimed at strengthening its cash position to meet ongoing working capital needs and fulfil existing loan obligations.

Of the RM36.73mil proceeds raised from the share disposal, MUI said RM29.29mil would be used to repay bank borrowings and related financing costs and RM6.81mil would be allocated for working capital requirements.

It added that the divestment would also allow MUI to avoid cash flow risks associated with CPRPD’s renovation needs, noting that CPRPD requires significant capital expenditure investments in order to achieve its full revenue potential.

The exercise was also expected to improve MUI’s profitability and help alleviate its financial burden arising from the accumulated losses of CPRPD, which totalled RM38.5mil based on the audited financial statements for the financial year ended June 30, 2023.

For the six months ended Dec 31, 2023, MUI made a net profit of RM15.62mil on a revenue of RM232.87mil, as compared to a net profit of RM25.49mil on a revenue of RM275.37mil in the corresponding quarter of the preceding year.

MUI’s shares gained half a sen to close at six sen yesterday.