This article first appeared in The Edge Financial Daily, on April 13, 2016.

KUALA LUMPUR: Berjaya Corp Bhd (BCorp), controlled by tycoon Tan Sri Vincent Tan, is looking to dispose of a 21.88% equity interest in Berjaya Auto Bhd (BAuto) to a special purpose vehicle (SPV) controlled by key members of Mazda distributor’s management, including its chief executive officer Datuk Seri Ben Yeoh Choon San, for RM526.26 million or RM2.10 per BAuto share.

Upon completion of the disposal, BCorp will cease to be a direct shareholder of BAuto, holding only a 33.33% stake in the SPV.

In a filing with Bursa Malaysia, BCorp said its wholly-owned subsidiary Berjaya Group Bhd (BGroup) yesterday signed a memorandum of understanding with Yeoh on the proposed disposal-cum-injection.

BAuto management will inject up to 114.52 million BAuto shares, representing about 10% equity interest in BAuto, into the SPV for up to RM240.49 million or RM2.10 per BAuto share. In return, BAuto management will receive 240.49 million new shares in the SPV, which work out to a 66.67% stake at par value.

BGroup will inject its entire stake of up to 250.6 million BAuto shares or a 21.88% stake in BAuto for RM526.26 million or RM2.10 per BAuto share into the SPV.

Of the RM526.26 million consideration, RM120.25 million will be satisfied via an issuance of 120.25 million new SPV shares, representing a 33.33% stake in the SPV, and the remaining RM406.01 million in cash. The SPV proposes to fund this cash portion through bank borrowings.

“Upon completion of the proposed disposal, the SPV, controlled by the BAuto management, will have up to 31.88% stake in BAuto, and will manage BAuto and its group of companies,” said BCorp.

The enlarged issued share capital of the SPV will be about RM360.74 million.