KUALA LUMPUR (April 28): Prestar Resources Bhd is disposing of its plant at Song Than 3 Industrial Park in Vietnam for VND118.8 billion (RM22.71 million) as part of plans to shift its manufacturing operation back to Malaysia.

The steel maker is expected to report a net gain of RM8 million from the disposal. "However, this amount is subject to change due to the fluctuation of foreign currency rates from time to time," it noted. 

The total original cost of the assets comprising land, building, fixture and fittings and related assets was RM12.1 million in December 2006. 

In a filing with Bursa Malaysia today, Prestar said proceeds from the disposal will be used to pare down its borrowings, after obtaining approval from Vietnam authority. 

Its wholly-owned subsidiary Prestar Industries (Vietnam) Co Ltd (PIVCL) had yesterday signed an asset purchase agreement with shoe maker Thai Binh Shoes Joint Stock Co for the proposed disposal. PIVCL has ceased its operation in December last year and is currently a dormant company.

Prestar said the disposal consideration was arrived at based on the highest bid received by PIVCL from the bidders who had submitted their bids.

"In addition, the buyer (Thai Binh Shoes) also has the best financial footing, strong social relationship and has the best utilisation plan for the assets," it added.

The disposal is expected to be completed within three months. As such, Prestar expects it to have positive effects to the group's earnings per share and net assets per share for the financial year ending Dec 31, 2017. 

Prestar’s share price gained four sen or 4.26% to close at 98 sen today, giving it a market capitalisation of RM187.24 million.