KUALA LUMPUR, June 25 — KUB Malaysia Bhd today disposed of its 40 per cent equity interest in KUB-Berjaya Enviro Sdn Bhd (KUBE) comprising nine million shares (share sale) to Berjaya Group Bhd (BGB) for RM80 million.
This would make KUBE cease to be an associated company of KUB.
In a filing with Bursa Malaysia, the company said the shares were disposed of by KUB to BGB, which owns the remaining 60 per cent stake in KUBE.
KUBE holds 100 per cent equity interest in KUB-Berjaya Energy Sdn Bhd, which in turn holds 60 per cent equity interest in KUB-Berjaya Kitar Sdn Bhd.
It said the disposal consideration of RM80 million was arrived at on a willing buyer-willing seller basis and was within the valuation range determined by KPMG Corporate Advisory Sdn Bhd.
The disposal was completed on June 25, 2020.
The proceeds would potentially be used for general working capital to finance KUB group’s day-to-day operating and administrative expenses, fund expansion of its core businesses, and explore further earnings-accretive business opportunities.
The proceeds could also be used to retire the existing loans of the group, leading to a lower interest expense and gearing ratio.
The breakdown of the utilisation has not been determined at this juncture and depends on the operating and funding requirements of the group.
The disposal would enable KUB to realise its investment that is not considered strategic or synergistic to the other operations of the group, and represented an opportunity for KUB to unlock a significant gain in the value of the investment in KUBE and strengthen its liquidity and cash flow position. — Bernama
