KUALA LUMPUR (Nov 13): Bio Osmo Bhd is disposing of its loss-making bottled drinking water business for RM2.5 million in line with its plan to focus on hospitality businesses.

The move is also in view of the continuous pricing squeeze, rising production costs and capacity constraint, the group said in a filing with Bursa Malaysia, adding that the disposal will allow it to curtail further losses in future.

Bio Osmo said it has entered into a share sale agreement with Start Sphere Sdn Bhd to dispose of its 100% equity interest in Amshore Holdings Sdn Bhd.

The group said the transaction, which is expected to be completed by the fourth quarter, could generate an estimated one-off gain on disposal of about RM100,000.

In April, Bio Osmo announced that its largest shareholder Datuk Seri Farouk Abdullah is proposing to inject hotels currently parked under his private vehicles into the group, effectively triggering a mandatory general offer.

With the disposal today, the group is a step closer to become a full-fledge hospitality group.

Bio Osmo signed a total of six share sale agreements to acquire hotels under the Impiana brand in Kuala Lumpur, Ipoh and Cherating, commercial land in Pangkor, as well as the hotel management company of Impiana for a total purchase consideration of RM425.9 million.

The group's share price closed unchanged at four sen today, giving it a market capitalisation of RM31.82 million.