SHAH ALAM, Sept 18 — Kumpulan Perangsang Selangor Bhd will no longer be a property developer after the complete disposal of its 56.57 per cent stake in Kumpulan Hartanah Selangor Bhd to Kumpulan Darul Ehsan Bhd (KDEB) for RM212.8 million in cash, said its head of Group Strategic Planning & Investment Kevin Lee.
Instead the group will focus on its core businesses of infrastructure and utilities, hospitality, golf club and recreation facilities, oil and gas as well as telecommunications, he said after the group’s Extraordinary General Meeting to get shareholders’ approval for the proposed disposal of its stake in Kumpulan Hartanah here today.
He said the infrastructure and utilities as well as hospitality businesses were the main cash cow for the group, contributing 60 per cent of revenue.
The group holds a 30 per cent stake in Selangor water concessionaire Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (SPLASH) and 90.83 per cent of Konsortium Abass Sdn Bhd, and operates the Quality Hotel chain in Shah Alam and Kuala Lumpur.
Kumpulan Perangsang’s exit from property development is not expected to have any material adverse impact on the financial results, as Kumpulan Hartanah has not contributed positively to the group’s consolidated profits since 2003.
Lee said the shareholders approved the proposed stake disposal and the proposed partial utilisation of the cash proceeds from the exercise for a special dividend to be declared to entitled shareholders after the completion of the disposal.
The disposal of Kumpulan Perangsang’s stake in Kumpulan Hartanah to KDEB is expected to be compeleted next month with the distribution of the special dividend expected to be made by the end of October, he said.
Apart from the proposed special dividend payment of RM99 million, the cash proceeds from the disposal will be utilised for repayment of borrowings amounting to RM18 million, defrayment of expenses (RM1.1 million), working capital (RM38 million) and new investments (RM56 million).
He said out of the RM56 million for new investments, RM12.05 million is to settle the balance of the group’s wholly-owned subsidiary Perangsang Telco Sdn Bhd’s investment in Ceres Telecom Sdn Bhd in a mobile virtual network operator business.
The remaining RM44 million will be allocated for future investments to be identified where the funds pending utilisation would be deposited into interest-bearing accounts with licensed financial institutions.
Total borrowings of Kumpulan Perangsang as at June this year stood at about RM1.2 billion, and the repayment of RM18 million for the borrowings is expected to result in interest savings of about RM1.37 million annually. — Bernama