Thursday 28 Mar 2024
By
main news image

KUALA LUMPUR: Chin Well Holdings Bhd is poised to fully consolidate the earnings of its subsidiary Chin Well Fasteners (Vietnam) Co Ltd (CW Vietnam) in the second half of its financial year ending June 30, 2015 (2HFY15), following Bursa Malaysia’s approval yesterday for the acquisition of the remaining 40% it does not already own in the unit.

In November 2014, Chin Well proposed to acquire the remaining 40% interest in CW Vietnam by acquiring the entire share capital of Asia Angel Holding Ltd, which owns the stake.

Chin Well (fundamental: 2.1; valuation: 2.4) will have to pay RM47.5 million for Asia Angel, which is to be satisfied by the issuance of 27 million new Chin Well shares at RM1.45 per share and a cash payment of RM8.3 million. The group will also assume net advances from the vendors of Asia Angel amounting to RM44.5 million.

In a filing with Bursa Malaysia yesterday, Chin Well said the regulator had approved the listing and quotation of 27 million new Chin Well shares pursuant to the acquisition.

“With the upcoming completion of this acquisition exercise, Chin Well is poised to fully consolidate the earnings of CW Vietnam to the group in 2HFY15,” Chin Well managing director Tsai Yung Chuan said in a separate media statement.

He added that the acquisition is timely for the group to leverage on the strong demand for do-it-yourself fasteners in Europe and the United States, which would subsequently be a positive boost to its financial performance from FY15 onwards.

Upon completion of the acquisition exercise, Chin Well will have a direct 60% equity stake in CW Vietnam, and an indirect 40% interest though its wholly-owned subsidiary Asia Angel.

Chin Well shares closed down two sen or 1.33% to RM1.48 yesterday, giving it a market capitalisation of RM408.8 million.

 

This article first appeared in The Edge Financial Daily, on January 20, 2015.

      Print
      Text Size
      Share