KUALA LUMPUR (Jan 16): HIL Industries Bhd has entered into two conditional share sale agreements through its wholly-owned subsidiary, AMJ Construction Sdn Bhd (AMJC), for the proposed acquisition of A&M Concrete Products Sdn Bhd (A&M Concrete) and Show Piece Sdn Bhd (Show Piece) for a total of RM71 million.
The first agreement was between AMJC and A&M Concrete major shareholders, Steven Junior Ng Kwee Leng and Malcolm Jeremy Ng Kwee Seng for the purchase of A&M Concrete.
The second agreement was between AMJC and Tan Sri Ng Boon Tong and Datuk Milton Norman Ng Kwee Leong for the proposed acquisition of Show Piece.
According to a filing with Bursa, the proposed acquisition of the 99% equity interest in A&M Concrete will cost RM22 million while the proposed acquisition of the entire equity interest in Show Piece, which in turn holds 100% equity interest in Innocentral Sdn Bhd (Innocentral), will cost RM49 million.
Kwee Leng and Kwee Seng will sell 49% and 50% of their stake in A&M Concrete respectively to HIL Industries. As for the proposed acquisition of Show Piece, it will be through Boon Tong who holds 99% stake in Show Piece while another 1% will be through Kwee Leong.
Boon Tong, Kwee Leong and Kwee Seng are the directors and major shareholders of HIL Industries while Kwee Leng is also a major shareholder of HIL Industries.
The announcement filed with Bursa said that the proposed acquisition fits into the Group’s business strategy to expand its property division and to reduce reliance on the manufacturing segment. A&M Concrete and Show Piece have obtained the approvals for the development of the Bukit Kemuning Land and the Sungai Jati Land I and the prospective development projects are expected to contribute positively to the Group’s future financial performance thereby enhancing HIL’s shareholders’ value.
Both the proposed acquisitions will be entirely satisfied via AMJC’s internally generated funds.
The purchase consideration for the proposed acquisition of A&M Concrete represents a discount of approximately 1.39% from the proportionate share of the adjusted net asset of A&M Concrete.
As for the purchase consideration for the proposed acquisition of Show Piece, it represents a discount of approximately 10.83% from the adjusted net asset of Show Piece. This was based on the indicative market value of the Sungai Jati Land of RM90 million as appraised by the independent valuer in its valuation report dated Dec 21, 2016.
As of closing, HIL Industries slipped lower by 1.05% or one sen to 94.5 sen, giving it a market capitalization of RM261.4 million.