LBS Bina exits Chinese motor circuit investment with RM125m stake sale

By RUPINDER SINGH

LBS Bina Group Bhd (LBGB) has finalised the sale of its stake in Lamdeal Investments Ltd (LIL), which owns a 60% share in Zhuhai International Circuit Ltd (ZICL), for 192.18 million yuan (approximately RM124.74 million) in cash.

This transaction marks LBGB’s exit from its decade-long investment in the Chinese motor racing circuit industry.

Alongside the equity transfer, the agreement includes the settlement of debts owed by LIL and its subsidiaries to LBGB, totalling 227.82 million yuan (about RM147.88 million).

LBGB anticipates a pro-forma gain of RM80 million from this divestment, which is expected to enhance its net asset value by 10% by the end of the financial year on December 31, 2024.

The decision to divest from LIL and ZICL aligns with LBGB’s strategic realignment and capital management strategy.

Despite holding a majority stake in ZICL, LIL has faced operational challenges such as stringent regulatory compliance requirements and financial losses, prompting LBGB to monetize its investment.

Importantly, this transaction does not require shareholder approval and positions LBGB favorably to capitalise on emerging opportunities while mitigating risks associated with its previous investment in ZICL.

The company remains optimistic about its future prospects, intending to utilise the proceeds from the sale to fund new projects and initiatives aimed at strengthening its market position and operational capabilities.

LBGB’s shares were suspended today pending the announcement and are expected to resume trading on Thursday.

As of Tuesday’s close, LBGB’s stock price was 89 sen, translating to a market capitalisation of approximately RM1.4 billion.