The disposal would raise RM529m in cash and an estimated gain of about RM293m
By KEVIN WONG / Pic By MUHD AMIN NAHARUL
UEM Edgenta Bhd will use most of the proceeds from the disposal of its 61.2% stake in Opus International Consultants Ltd (OIC) to reduce debts.
The disposal of the stake would raise RM528.6 million in cash (at RM5.84 per share) and an estimated gain of about RM293.3 million on a consolidated basis.
UEM Edgenta MD Datuk Azmir Merican said the cash would help the company’s balance sheet and move its next phase of growth.
“About RM400 million from the total proceeds will be utilised to pay debts within six months where it will reduce our gross gearing significantly to 0.38 times from 0.79 times.
“At the same time, about RM100 million will be allocated for general corporate purposes, while the board is also considering to issue out a special dividend to our shareholders,” he said after the company’s EGM yesterday in Petaling Jaya.
UEM Edgenta’s total outstanding loan is at RM1.2 billion while net gearing would be reduced to 0.25 times.
Based on UEM Edgenta’s framework, the company would only consider the dividend in the fourth quarter or February as the company would need time to conclude the transaction.
The disposal of OIC stakes would see UEM Edgenta no longer expose to OIC’s overseas operations in Canada and Australia.
However, for the last two years, OIC has been dealing with the weakening economies in the oil and gas industry.
Azmir added that the disposal would definitely see a revenue gap, as 40% of revenue came from OIC.
“However, eventually, we will be able to fill the revenue gap as it is just a matter of how fast we are able to fill the gap. We are confident that we can accomplish this within the next few years,” he said.
Concurrently, UEM Edgenta will focus on streamlining its operations, drive organic growth and allocate resources into three core sectors — healthcare, infrastructure and real estate.
Azmir said it is important for the company to have good sustainable long-term businesses.
“We are on the lookout to have sustainable long-term business playfield because we want to improve our core sectors offerings for both domestic and international, which would result in better yields,” he said.
The disposal of OIC is expected to be completed by the end of the year a sit is pending the approval from the Overseas Investment Office of New Zealand.
UEM Edgenta received a total of 99.99% approval from its shareholders for the disposal of OIC stake to WSP Global Inc.