CMS approves UBG sale
Monday, 11 January 2010, Kuching — Late Friday evening, 8 January 2010, Cahya Mata Sarawak Berhad (CMS) made an announcement to Bursa Malaysia on an offer it had received from PetroSaudi International Ltd to acquire all the ordinary shares held by CMS subsidiaries, Concordance Holdings Sdn Bhd and PPES Works (Sarawak) Sdn Bhd (representing 37.21% of UBG’s issued and paid-up share capital), in UBG Berhad.
The proposed disposal entails the disposal by Concordance of 141,558,155 ordinary shares of RM0.25 each in UBG representing approximately 28.29% equity interests in UBG for a cash consideration of RM353,895,388; and the disposal by PPES Works of its 44,652,000 UBG shares representing approximately 8.92% equity interests in UBG for a cash consideration of RM111,630,000.
On 8 January 2010, CMS had approved the said offer, subject to, inter-alia, the approval of shareholders of CMS in an extraordinary general meeting to be convened. The total cash consideration to Concordance and PPES Works for the proposed disposal amounts to RM465,525,388. Barring any unforeseen circumstances, the proposed disposal is expected to be completed by the first quarter of 2010.
The proposed disposal will enable CMS and its subsidiaries to receive an immediate return, fully in cash, on our investment in UBG. The significant gross cash inflow of approximately RM465.53 million can then be deployed to focus on investment opportunities which can potentially provide higher yield and returns and/or to enhance shareholders’ value.
In comparison, CMS’ current investment in UBG is only at an associate level, with a cashflow contribution from UBG limited to dividend payments. Furthermore, capital appreciation has been muted given the overall economic and market sentiment, coupled with the low trading liquidity of UBG shares.
Given this, it has been decided that CMS take advantage of this opportunity to exit so as to enable the Group to focus on our own core businesses, to reduce our external indebtedness, and to take advantage of the extensive emerging business opportunities arising through SCORE, including the planned SALCO smelter.
For the full Bursa Malaysia Announcement, please go to CMS’ website.
