This article first appeared in The Edge Financial Daily on March 6, 2020

KUALA LUMPUR: Careplus Group Bhd has determined the final disposal consideration for its 50% stake in loss-making subsidiary Careplus (M) Sdn Bhd (CMSB) at RM26.97 million, versus its previous indicative consideration of RM26.81 million.

On Feb 5, the company proposed a joint venture with Ansell Services (Asia) Sdn Bhd, in which the latter will acquire the 50% stake, equivalent to 14.55 million shares.

Careplus is expected to record a pro forma gain of RM16.3 million on the proposed disposal.

Careplus has also agreed to grant Ansell options to buy Careplus’ remaining stake in CMSB, or to sell back its stake in CMSB to Careplus, pending certain criteria such as a change in Careplus’ shareholdings or the period of the joint venture.

CMSB is principally involved in the manufacture of rubber gloves and has been loss-making for the last four years — albeit with narrowing losses on the back of a growing top line arising from the commissioning of new production lines.

In the financial year ended Dec 31, 2019, CMSB made a loss of RM1.85 million on the back of RM157.09 million in revenue, and had net assets of RM35.75 million.