Thursday 28 Mar 2024
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KUALA LUMPUR (March 17): Atlan Holdings Bhd is planning to dispose of up to 25% plus one share of its interest in duty-free merchandise trader DFZ Capital Bhd to Heinemann Asia Pacific Pte Ltd, in three separate tranches for about €52.21 million (RM239.1 million), cash, to realise part of its investments in the unit.

DFZ is a wholly-owned subsidiary of Duty Free International Ltd (DFIL), which is listed on the Catalist board of the Singapore Exchange. Atlan has a 79.47% stake in DFIL.

Atlan is expected to realise a gain on disposal, or an excess of the disposal consideration over the book value on the sale of the first 10% plus one share of its interest in DFZ, of about RM74.55 million.

As to the proposed disposal of the remainder stake, Atlan should realise a gain on disposal, or an excess of the disposal consideration over the book value, of about RM199.9 million.

In a filing to Bursa Malaysia today, Atlan said DFIL had entered into a sale and purchase agreement (SPA) with Heinemann to dispose of a 10% equity interest plus one ordinary share in DFZ to Heinemann for €19.7 million, cash. Deemed the first tranche of share sales, Atlan intends to complete the sale by the third quarter of 2016.

Under the agreement, DFIL also grants two other call options to Heinemann, to buy a second and third tranche of DFZ shares, of which the total aggregate shall not exceed 15% of the issued and paid-up share capital of DFZ, as at the date of the agreement.

Each call option may only be exercised once. The second call option — valid in the 12 months after the expiry of the first call option period — will still be valid even if the first call option, which is valid for 18 months from the completion of the first tranche's sale, is not exercised. Both tranches are to be fully satisfied in cash.

Pursuant to the SPA, Heineman also granted DFIL the option to buy back all the 25% plus one share in DFZ at the same price Heineman acquires them.

"Assuming that Heinemann acquires an additional 15% equity interest in DFZ pursuant to the exercise of the third tranche call option, the proceeds from the proposed disposal will be up to €52.21 million," read the group's announcement.

The group said it intends to use 85% of the proceeds for general corporate requirements such as funding of potential business opportunities, 10% for general working capital and the remainder for estimated expenses.

According to Atlan, DFIL said the stake disposal will enable DFIL to benefit from the resources and expertise of Heinemann in the areas of product assortment and costing, retail store management, distribution and logistics management of DFZ products.

Heinemann is a wholly-owned subsidiary of Gebr. Heinemann SE & Co KG, one of the more prominent global travel retail players in the world.

Save for the gain from disposal of the first tranche share sale, the proposed disposal is not expected to have a material impact on earnings of Atlan Holdings for the financial year ending Feb 28, 2017 (FY17), added Atlan.

Atlan shares did not trade today. It was last traded yesterday at RM4.35, valuing it at RM1.1 billion.

 

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