KUALA LUMPUR (Oct 3): PRG Holdings has disposed of a 12% stake in Hong Kong-listed Furniweb Holdings Ltd, representing 60.48 million shares, for 50 HK cents per share (26 sen) or RM15.96 million.

In a filing to the local stock exchange today, PRG said the proposed disposal enables it to rationalise its investment in Furniweb and the proceeds raised will be used for expansion into healthcare division and working capital for the group's business and operations.

Furniweb is principally engaged in the manufacturing and sale of elastic textile and webbing.

PRG showed that from the total proceeds raised, RM8 million will be for payments to contractors of property development projects, RM3.69 million for cash reserve for future working capital, and RM3.48 million for balance purchase consideration of sales and purchase of issued and paid up capital of Esther Postpartum Care Sdn Bhd.

Upon completion of the proposed disposal, PRG's shareholdings in Furniweb will be reduced from 378 million shares representing 75% to 317.52 million shares representing 63%.

"The disposal price of HK$0.50 per Sale Share is 34% above the net tangible assets per share of HK$0.37 of Furniweb based on the latest announced unaudited interim financial statements for the six months ended June 30, 2018," said PRG.

The original cost of investment for the 60.48 million shares is RM11.14 million as at Oct 1, 2017, said PRG.

At 2.10pm, shares of PRG were down one sen or 1.3% to 76 sen, bringing its market capitalisation to RM235.27 million.