KUALA LUMPUR (Feb 13): CSH Alliance Bhd (formerly KTG Bhd) is disposing of its electric vehicles (EV) distributor Alliance EV Sdn Bhd for RM20 million cash to glovemaker Hong Seng Consolidated Bhd.

Alliance EV owns 55.32 acres of leasehold industrial land in Tanjung Malim, Perak, which is intended for the set-up of an EV battery manufacturing plant and local commercial EV assembly plant, CSH said in a stock exchange filing on Monday (Feb 13).

Alliance EV has also obtained a manufacturing licence from EV producer BYD Co Ltd for the assembly of the latter’s commercial electric van T3 at the Tanjung Malim land, it said.

The Tanjung Malim land owned by Alliance EV was acquired last year from Minetech Resources Bhd for a price tag of RM12 million, according to reports.

In a separate filing, CSH said Alliance EV also owns a 1.07 acre land in Petaling Jaya, valued at RM10.38 million.

It was reported that Alliance EV was also applying for approved permits (APs) from relevant authorities to bring in complete built-up (CBU) units of the van prior to the start of the assembly operations.

CSH said despite Alliance EV’s prospects in its EV venture, the business would require “extensive resources” and “substantial working capital”, prompting it to realise the value of the investment via the sale.

In a separate statement, Hong Seng said it will fund the acquisition via internally generated funds. It expects the plan to be completed in the second quarter of this year.

CSH Alliance’s substantial shareholders include MMAG Holdings Bhd (16.6%) and ChipSeng Heng Holdings Sdn Bhd (12.17%).

Hong Seng’s shareholders include Datuk Seri Teoh Hai Hin (12.34%), Chan Hooi Guan (8.06%) and Lester Chin (11.59%).

Following the oversupply in the rubber glove sector post-pandemic, Hong Seng turned into the red in its latest quarter. However, it posted full-year net profit of RM97.19 million in the 12-month ended Sept 30, 2022 (FY22), on revenue of RM198.4 million. 

The group is in net cash position of RM60.57 million, with cash and bank balances of RM74.18 million, against short- and long-term borrowings of RM1.29 million and RM12.32 million respectively.   

Shares of Hong Seng closed unchanged at 20 sen on Monday, giving it a market capitalisation of RM1.02 billion.

CSH Alliance shares settled unchanged at 6.5 sen, giving it a market capitalisation of RM83.38 million.