KUALA LUMPUR (Sept 24): Parkson Holdings Bhd said the sale of a 70% stake in Parkson Credit Sdn Bhd to its Hong Kong-listed subsidiary Parkson Retail Group Ltd will result in a smaller share of future contribution from the credit service business.

In a filing with Bursa Malaysia, Parkson Holdings explained that the divestment will dilute its effective shareholding in Parkson Credit to 68.48%, from 100%, “resulting in a lower future earnings contribution from Parkson Credit to the Parkson Holdings Group”.  

Earlier this month, on Sept 13, Parkson Holdings announced that it is selling a 70% stake in Parkson Credit, which the group owns through wholly-owned Parkson Credit Holdings Sdn Bhd.

The purchaser is Parkson Retail Group Ltd, in which Parkson Holdings owns a 54.97% stake.

However, Parkson Holdings did not reveal its rationale for the share sale in the announcement.

According to Parkson Retail’s filing with the Hong Kong Stock Exchange, the purchase price was arrived at after taking into account Parkson Credit’s earnings for the financial year ended June 30, 2017 (FY17) and FY18.

Parkson Credit posted a profit after tax of RM9.01 million for FY18 and RM5.8 million for FY17.

Parkson Retail appointed a business valuer, whose valuation report found Parkson Credit worth RM74.96 million as at March 31 this year.

The purchase price is at a discount of approximately 7% to the valuation of the sale shares, according to Parkson Retail.