Completion of UBG equity disposal
On 30 September 2010, it was announced to Bursa Malaysia that the disposal exercise of CMS’ entire equity stake in UBG Berhad had been completed with the direct business transaction to facilitate the disposal having been effected on the same date. The Announcement followed an earlier announcement by UBG Berhad on 29 September 2010 informing that the acquisition of CMS’ shares in UBG by PetroSaudi International Ltd had become unconditional.
Speaking on the completion of the UBG deal, CMS Group Managing Director Dato’ Richard Curtis said, “We are pleased that the disposal exercise of CMS’ entire equity stake in UBG Berhad, equivalent to 37.21% of UBG’s issued and paid-up share capital, has been concluded. The disposal will enable CMS and its subsidiaries to receive an immediate return in cash of approximately RM465.53 million on our investment in UBG.”
CMS’ stake in UBG Berhad was through its wholly-owned subsidiary, Concordance Holdings which held a 28.29% interest in UBG, and through its 51% owned subsidiary, PPES Works (Sarawak) which held a 8.92% interest in UBG. Traditionally a financial services entity, UBG changed its corporate direction in 2007 following the disposal of RHB and went on to acquire 2 niche construction companies, namely Putrajaya Perdana Berhad and Loh & Loh Corporation Berhad.
“CMS Group can now focus on growing our core businesses of construction materials and property development in land banks around Kuching. The inflow of returns will also enable CMS to assess and look to participate in other investment opportunities which can potentially provide a higher yield and returns to enhance our shareholders’ value”, said Dato’ Richard further.
With the accelerated plans of the Sarawak Corridor of Renewable Energy (SCORE) taking centre stage in the State’s development up till the year 2030, CMS Group hopes to ride on the extensive emerging business opportunities, which include that of the planned SALCO smelter. “As a business entity, we are always on the look-out for opportunities that present greater growth and synergy for CMS Group”, added Dato’ Richard.
The proposed acquisition of CMS’ stake in UBG by PetroSaudi International was first announced on 29 December 2009. Several days later, on 8 January 2010, CMS reverted to PetroSaudi International with approval from its Board of Directors to proceed with the sale, subject to approval of its shareholders. CMS shareholders met at an Extraordinary General Meeting on 30 April 2010 and voted in favour of the disposal of UBG.
On 29 April, PetroSaudi International wrote to inform CMS that it was awaiting certain regulatory approvals in relation to the acquisition of 186,210,155 ordinary shares of RM0.25 each in UBG. All approvals were finally received on 29 September 2010.
