POS Malaysia Bhd plans to streamline operations and focus on core business areas by divesting its subsidiary PNSL Bhd for approximately RM123.21 million, transferring its entire equity interest of 49 million shares in PNSL through Pos Logistics Bhd to SWA Shipping Sdn Bhd.

The disposal consideration, subject to adjustment on completion, will be entirely settled in cash.

The sum encompasses two key components: a cash consideration of RM55.61 million for the equity interest in PNSL and the settlement of outstanding intra-group trading debts and advances owed by PNSL to Pos Logistics and its group of companies amounting to RM67.60 million.

PNSL, the subsidiary being divested, is primarily engaged in providing services for ship chartering, ship operating, and ship owning, with a focus on handling bulk cargoes and specialised cement carrier services.

Pos Malaysia said the proposed disposal enables it to unlock the value of its non-core investment in PNSL, strengthening the group’s cash flow and positively impacting future earnings through loan repayment and interest savings of RM1.40 million annually, while also reducing the group’s gearing.

“In addition, the company has recorded a loss after tax of RM3.43 million based on the latest audited financial statements for the FYE December 31, 2023. As such, the proposed disposal would allow the group to reposition and realign its investments into more profitable businesses with growth prospects, in line with current industry trends,” it said.

With Pos Malaysia’s strategic focus shifting away from this non-core business segment, the decision to sell aligns with its long-term growth strategy.

The sale proceeds, once realised, will be utilised strategically to address various financial obligations and capitalise on growth opportunities.

Approximately RM27.81 million will be allocated for the partial repayment of bank borrowings within 12 months, aiming to reduce interest costs and improve liquidity.

Another significant portion of RM92.94 million will be earmarked for fulfilling working capital requirements over the next 24 months, covering staff-related expenses and operational needs.

Additionally, RM2.46 million will be allocated for expenses related to the disposal within six months.

Furthermore, any surplus or shortfall in allocated funds will be judiciously managed, with profits from investments supporting future capital needs.

Importantly, the proposed disposal will not categorise Pos Malaysia as a cash company or an affected listed issuer under Practice Note 17 of the Main Market Listing Requirements of Bursa Securities.

The completion of the proposed disposal is subject to regulatory approvals and other customary closing conditions.

Pos Malaysia expects the transaction to be finalised within four months from the signing of the SPA, barring any unforeseen circumstances. — TMR