Kuchai Development to dispose of assets, liabilities to Sungei Bagan Rubber Company for RM275.47mil

KUALA LUMPUR: Kuchai Development Bhd has entered into a conditional master sale and purchase agreement with Sungei Bagan Rubber Company (Malaya) Bhd to dispose of substantially all the assets and liabilities in Kuchai Development to Sungei Bagan Rubber Company at a disposal consideration of RM275.47 million.

In a filing with Bursa Malaysia today, Kuchai Development said the transaction would be satisfied entirely via the issuance of 27.52 million new Sungei Bagan Rubber Company shares at an issue price of RM10.01 per share.

It said Kuchai Development also intended to undertake a proposed distribution to distribute all Sungei Bagan Rubber Company shares held by Kuchai Development arising from the proposed disposal to the entitled shareholders of Kuchai Development by way of a proposed capital reduction and repayment pursuant to Section 116 of the Companies Act, 2016 and proposed dividend-in-specie at an entitlement date to be determined later.

“The disposal allows Kuchai Development and Sungei Bagan Rubber Company to consolidate, synergise and merge their investments to Sungei Bagan Rubber Company,” it said.

Meanwhile, Kuchai Development said the company intended to undertake the proposed capital reduction and repayment and proposed dividend-in-specie under the proposed distribution to facilitate the distribution of the consideration shares to the entitled shareholders.

“The proposed distribution will enable Kuchai Development to reward the entitled shareholders for their continuous support by allowing them to hold shares directly in Sungei Bagan Rubber Company instead of through Kuchai Development at no additional cost.

“This will enable the entitled shareholders to make separate investment decisions on their shareholdings in Kuchai Development and Sungei Bagan Rubber Company and monetise their investments in either company should they wish to do so,” it said.

Kuchai Development and Sungei Bagan Rubber Company are both controlled by a common major shareholder, KRCB, and invest in the same class of assets such as equity instruments listed on the Singapore Stock Exchange, debt instruments (bonds and redeemable preference shares outside Malaysia) and investment properties. – BK