On 12 September 2013, Salcon Berhad announced that it and its its joint venture company Salcon Water (Asia) Ltd have entered into two Sale and Purchase Agreements (SPA) with Beijing Enterprises Water Group Limited (BEWGL) for the disposal of 100% shares of six (6) water companies for a total consideration of RMB955 million (approximately RM518.3 mil).
Upon completion, the exercise will bring in total cash of RM 284 million (net of liabilities) and will contribute RM94.6 million of profit to the Group. The disposal of the Group’s China assets allows Salcon to retain a healthy balance sheet with improvements on its Earnings Per Share (EPS) from 2.21 sen to 16.9 sen, and net asset per share from RM0.80 to RM0.91.
“We view this offer an extremely attractive proposition, and also a win win deal for both parties. With our positive view of the growth opportunities of our property development and water business in Malaysia, this is indeed a good opportunity for us to unlock the value of our investment in the PRC and allow us to focus on growing our business domestically.” says Dato Eddy Leong, Executive Director of Salcon Berhad. “This exercise will give Salcon more funds to secure good land banks and to expand further into property development.”
Salcon has received approval from shareholders to venture into property development during its EGM on 19th March 2013, in an effort to diversify its income base.
Salcon’s maiden property project features a 21-storey commercial building comprising 12 units of two-storey shop office with total net saleable area of 40,600 sq ft and 280 units of SOHO with net saleable area of 244,460 sqft in Selayang.
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