KUALA LUMPUR (Feb 28): Malayan United Industries Bhd's (MUI) wholly owned subsidiary Oriental Omega Sdn Bhd had on Monday (Feb 27) disposed of its 33.5 million shares or a 4.34% stake in confectionery and cocoa-based biscuits maker Pan Malaysia Corp Bhd (PMC) to Fortress Opportunistic Growth Fund (FOGF) and Fortress Capital Asset Management (M) Sdn Bhd (FCAM) for RM6.03 million cash.

This leaves MUI and its subsidiaries with 394.65 million or 51.15% equity interest in PMC after the disposal. Of this, Oriental Omega owns a direct 2.61 million shares or a 0.34% shareholding in PMC.

The disposal consideration represented a discount of two sen or 10% to the five-day volume weighted average price on Feb 24, 2023 of 20 sen per PMC share, resulting in a loss of RM4.76 million.

However, MUI said the disposal is not expected to have any material effect on the group's earnings for the financial year ending June 30, 2023 because the loss of RM4.76 million resulting from the disposal will be recorded in its accumulated losses.

In a filing with Bursa Malaysia on Tuesday, MUI said the disposal will allow the group to strengthen its financial position. It intends to use the proceeds for working capital.

MUI also said the original costs of investment by Oriental Omega in the sale of shares being disposed of were RM55.06 million between 1997 and 2013. The group’s carrying value of the sale shares as at Dec 31, 2022 was RM10.79 million, it added.

At noon break on Tuesday, MUI shares were unchanged at 7.5 sen, giving it a market capitalisation of RM241.94 million. A total of 394,200 shares were traded. Shares of PMC were also unchanged at 20 sen, translating into a market capitalisation of RM154.67 million. It only saw 7,400 shares changed hands during morning trading.