KUALA LUMPUR, June 4 — MAA Group Bhd (MAAG) is seeking shareholders’ approval for the variation of RM91.87 million to the utilisation of proceeds arising from the disposal of MAA Takaful Bhd (MAAT), which had been initially earmarked for future investment opportunity(ies)/prospective business(es).
The approval would be proposed at the forthcoming extraordinary general meeting (EGM) to be convened at a later date, it said in a filing with Bursa Malaysia today.
MAAG disposed of its 75 per cent equity in MAAT to Zurich Insurance Company Ltd (Zurich) for RM393.75 million, with the exercise completed on June 30, 2016.
Due to certain downward adjustments in accordance with the terms and conditions of the sale purchase agreement, the actual disposal proceeds arising from the disposal was slashed to RM364.4 million.
On June 5, 2018, the company’s shareholders had, at an EGM, approved a variation to the utilisation of the disposal proceeds, where the revised utilisation of RM71.88 million, originally earmarked for future investment opportunity(ies)/prospective new business(es) to be acquired will be used for the company’s working capital, to fund its share buy-back exercise and for payment of dividends to shareholders.
“As at the date of this announcement, the company has yet to fully utilise RM162 million of the disposal proceeds, which had been earmarked for future investment opportunity(ies)/prospective new business(es) to be acquired.
“As such, the board wishes to further vary the utilisation of proceeds,” MAAG said.
It said the variation to the utilisation of proceeds for additional working capital is mainly to support the existing businesses of the group — for its credit division (involving factoring and money lending) and its education businesses.
The additional working capital will also enable the group to further expand its factoring and money lending businesses without any disruption in funding.
MAAG proposes to allocate an additional RM53.58 million, that is RM29.96 million from the remaining First Tranche balance after the RM38.29 million acquisitions of HELP College of Arts and Technology Sdn Bhd (HCAT) and Scholastic IB International Sdn Bhd (SIB), as well as the subscription of shares in Altech Chemicals Ltd and RM23.62 million from the second tranche, which was initially allocated for future investment opportunity(ies)/prospective business(es) for the working capital requirements of the group.
From the RM53.58 million, RM44.73 million has been utilised for working capital of HCAT, MAA Credit Bhd and MAAX Factor Sdn Bhd.
Meanwhile, MAAG said the remaining sum of RM70.13 million from the second tranche will be retained by the company for future investment opportunity(ies)/prospective business(es) and/or assets to be acquired and/or for additional working capital for the group or adjusted to any category(ies)/usage(s) as the board deems fit and in the best interest of the company’s long-term prospects and profitability.
It said the acquisitions of HCAT and SIB will enable the group to provide a complete education service from secondary education to tertiary education and will enable the it to have a stable stream of income and profits and accelerate expansion and growth in the education business segment.
In addition, the subscription of shares in Altech provides the group with an opportunity to participate in the future growth of Altech and enjoy the potential capital appreciation in the value of the investment upon operation of the high-purity alumina plant.
“To date, the company has not complied with the Practice Note 17 (PN17) regularisation requirements pursuant to the Listing Requirements.
“The board is constantly evaluating various options for the optimal utilisation of the disposal proceeds and will focus on acquiring new business(es) and/or assets to enhance MAAG’s earnings profile, regulate its financial condition and address its PN17 status,” it added. — Bernama
