KUALA LUMPUR (July 9): Stationery maker Pelikan International Corp Bhd was the second-most active stock on Bursa Malaysia this morning, after it announced plans for a special cash distribution to reward its shareholders following the sale of its logistics centre in Germany.
Pelikan, however, did not specify how much cash it would distribute to its shareholders.
At 9.26am, it was up 3.5 sen or 9.09% to 42 sen, with 28.06 million shares traded — almost four times its 200-day average volume of 7.25 million shares. The company was valued at RM232.23 million.
Yesterday, the company announced that it had disposed of the property for a cash consideration of €81 million (about RM400 million).
Pelikan said in a bourse filing that its subsidiary Pelikan Group GmbH (PGG) had entered into a conditional sale and purchase agreement (SPA) with HE4 Falkensee 1 S.à r.l. and HE4 Falkensee 2 S.à r.l. to dispose of its logistics centre located at Straße der Einheit, Falkensee, Germany.
Concurrently, PGG and HE4 Falkensee 2 S.à r.l also entered into a conditional lease agreement, for the latter to remain as a tenant of the rental property for a five-year lease period commencing on the completion of the proposed disposal.
The rental property’s annual gross lease fee of €4.15 million (equivalent to approximately RM20.46 million) is payable on a monthly basis.
Based on Pelikan’s audited consolidated financial statements for the financial year ended Dec 31, 2020 (FY20), the disposal is expected to realise an estimated one-off gain of RM184.83 million.
“The disposal consideration will be mainly used for the group’s working capital requirements, rewarding the shareholders through special cash distribution, further reorganising its operations internally and for partial repayment of its bank borrowings, thereby enhancing overall profitability and lowering its financing cost,” it said.
According to Pelikan, from the RM399.33 million proceeds, RM200 million will be used to repay bank borrowings, RM161.93 million will be used for working capital and RM24.6 million will be used for internal reorganisation. That leaves RM12.8 million from the proceeds.
The sale of the property is expected to cut its gearing ratio to 0.31 times from 0.86 times in FY20, while boosting its earnings per share to 32.53 sen from 1.89 sen.
According to its financial report for the first quarter ended March 31, 2021, its cash and cash equivalents are RM13.89 million, while its borrowings are at RM399.46 million.