KUALA LUMPUR: Hap Seng Consolidated Bhd
(HSCB) has proposed to dispose of its 50.82% stake in Singapore-listed Hafary Holdings Ltd for S$140.03mil (RM446.38mil) cash.
Hap Seng Consolidated told the stock exchange its wholly-owned subsidiary Hap Seng Investment Holdings Pte Ltd (HSIH) has agreed to accept a voluntary conditional takeover offer from 23 Capital Pte Ltd for all 218.79 million Hafary shares held by HSIH.
The offer values each Hafary share at S$0.64, equivalent to about RM2.04. Upon completion of the proposed disposal, Hafary will cease to be a subsidiary of HSIH.
“While Hap Seng Consolidated and its subsidiaries will forego future earnings contribution from Hafary, the proposed disposal enables the group to realise its investment in cash at an attractive valuation, thereby strengthening its financial position and enhancing financial flexibility,” the company said.
“The proposed disposal also provides HSIH with the opportunity to exit the downstream segment of the building materials market and realise an estimated gross gain on disposal of approximately RM187.3mil,” the firm noted.
Of the RM446.38mil gross proceeds, RM445.38mil is earmarked for the repayment of borrowings within 36 months, while RM1mil will be used to defray expenses related to the disposal.
The debt repayment is expected to generate annual interest savings, net of tax, of about RM14.9mil.
