KUALA LUMPUR (May 11): Integrated poultry farmer Lay Hong Bhd clarified that its plan to sell a 30% stake in its grocery retailer unit, G-Mart Borneo Retail Sdn Bhd, to PanPages Bhd, is not expected to result in material gain or loss.
This is assuming the transaction was effected on March 31, Lay Hong said in a filing with Bursa Malaysia.
Lay Hong will reduce the price of the stake sale by 12% to RM9.46 million, from RM10.75 million announced previously, if the net assets in its management accounts for financial year ended March 31, 2017 (FY2017) — which was not unaudited — turns out to be less than 12% of the upcoming audited accounts.
“If the net asset as stated in the unaudited management accounts of as at March 31, 2017 is lesser by 10% of the net asset stated in the audited accounts as at March 31, 2017, then the purchase consideration shall not be adjusted,” Lay Hong added.
To proceed with the stake sale, Lay Hong said PanPages will be required to pay a refundable deposit of RM1 million, once both parties have inked the share sale agreement.
Lay Hong said PanPages will be required to pay the remaining balance of RM9.75 million once it has fulfilled the necessary conditions precedent by obtaining approval from various regulatory authorities.
Lay Hong said G-Mart is in the red with its net loss widening to RM1.32 million or 0.21 sen per share in FY17, from RM234,692 or 0.04 sen per share in FY16.
On Monday, Lay Hong announced its plan to rope in PanPages as its new partner and investor by selling its 11.4 million shares or 30% stake in the G-Mart — which has 16 outlets in Sabah — for 94.3 sen per share or a total of RM10.75 million.
Stressing that “the world is changing fast”, Lay Hong said PanPages’ entry into G-Mart will transform the traditional ways of doing retail business by producing an electronic commerce platform.
The share prices of Lay Hong and PanPages both ended lower today at 87.5 sen and 32.5 sen each, for a market capitalisation of RM532.66 million and RM86.28 million respectively.