KUALA LUMPUR (March 30): Nylex (M) Bhd is monetising its logistics subsidiary, NYL Logistics Sdn Bhd, for RM14.4 million, as the group does not foresee it delivering high returns.

In a filing with the stock exchange today, Nylex said it, together with Bon Kok Meng, has signed a share sale agreement to dispose of 2.2 million shares representing 100% of the issued and paid-up share capital in NYL to Astachem Holdings Sdn Bhd.

Cash proceeds raised via the proposed disposal will be used for Nylex's working capital, it added.

Nylex had in May 2016 bought over a 60% stake in NYL from Bon Pow Koon for RM6.38 million, while the remaining 40% stake was held by Bon Kok Meng.

According to the group, it first acquired NYL with hopes to emerge as an integrated chemical group involved in manufacturing, distribution, and transportation to cater to its customers' needs.

NYL is in the business of transport, cartage, and haulage contractors and agencies services, while Nylex group's core businesses are the manufacturing and distribution of industrial chemicals and related products.

But now, Kok Meng — who not only is the existing 40% shareholder but also runs the operations of NYL — has planned to exit the business.

Following Kok Meng's intention to leave, Nylex said it "does not foresee high returns to be contributed by NYL to the group".

"The proposed disposal will allow Nylex to unlock and monetise its investment made, and reallocate its resources to other key businesses within the group," it added.

Based on an annual report, Kok Meng currently heads the logistics division of ACE-Market listed Ancom Logistics Bhd.

Both Ancom Logistics and Nylex are subsidiaries of diversified group Ancom Bhd, which is listed on the Main Board of the local stock exchange.

Nylex expects the proposed disposal, which will contribute a gain of RM1 million, to be completed within 90 days.

The proposed disposal will not have any material effect on the earnings and net assets of the group for the financial year ending May 31, 2018, it said.

Shares in Nylex closed unchanged at 78 sen today, after 79,100 shares were done, translating into a market capitalisation of RM151.58 million.