PRG terminates deal to buy stake in loss-making retailer from HK-listed subsidiary

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KUALA LUMPUR (Nov 8): PRG Holdings Bhd, whose share price doubled and subsequently fell by half in the course of two months, has mutually cancelled the plan to buy the entire stake of a loss-making retail company from its 54.19%-owned Hong Kong-listed unit Furniweb Holdings Ltd.

According to a filing with Bursa Malaysia today, PRG and Furniweb have mutually agreed to terminate the Shares Sale Agreement (SSA) to acquire Premier Management International Ltd (PMIL).

PMIL sells luxury fashion apparel, footwear and ancillary products.

No particular reason was given for the termination.

However, in conjunction with the termination, Furniweb had entered into a subscription agreement with Ignatius International Private Ltd as the subscriber to subscribe for 35% stake in PMIL at the subscription price of RM6.45 million (or HK$12.18 million), said PRG.

“The subscription monies will be utilised for additional working capital of the PMIL group besides the business synergy and positive impact to the development of the business of the PMIL group and to the PRG group as a whole,” said PRG.

On Aug 7, PRG revealed that PMIL recorded a loss after tax of RM761,129 for the financial year ended Dec 31, 2018.

PRG noted that the acquisition was undertaken to streamline the business activities and divisions within PRG Group for operational efficiency.

Shares of PRG, which have been under the RM1 level since December 2017, spiked up to more than double from 58.5 sen on Aug 23 to RM1.23 on Sept 24 and closed at 61.5 sen today — or 61.5 sen lower in just six weeks.

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