KUALA LUMPUR (June 24): Hong Seng Consolidated Bhd has disposed of its 35% stake in life science healthcare service provider, Pantasniaga Sdn Bhd for RM24 million cash.

In a Bursa Malaysia filing on Friday (June 24), the healthcare industry supply chain management specialist said its wholly-owned subsidiary HS Bio Sdn Bhd had entered into shares sales agreement with Nexterra Sdn Bhd for the stake disposal.

According to the group, Nexterra, who acquired the stake from Hong Seng, is currently engaged in the business of investment holding. Former Director General of the Public Service Department (PSD) Tan Sri Mohd Khairul Adib Abd Rahman is the sole director and shareholder of Nexterra.

Mohd Khairul, 60, served as PSD Director General from October 2019 to January 2022. He was previously the Secretary General for the Ministry of Transport.

Following the disposal, Hong Seng’s holding in Pantasniaga will be reduced from 51% to 16%. It is expected to gain RM20 million from the proposed disposal.

Pantasniaga has secured multiple contracts to supply Covid-19 PCR test kits, including an ongoing arrangement with the Ministry of Health (RM112.32 million for one-year period until July 25, 2022).

Hong Seng acquired the 51% stake in Oct 2020 from Norashikin Tajuddin and Lee Yeow Tuck for RM51. The deal then considered Pantasniaga’s losses in 2019, and that “Pantasniaga intends to leverage on the resources and network of Hong Seng Group”, it said.  

Commenting on the proposed disposal, Hong Seng Executive Director Christopher Chan said the proceeds received from the said disposal could be reallocated to mainly fund the group's existing businesses and/or any future prospective businesses.

“The Proposed disposal is viewed as a positive move that provides a timely opportunity for the Group to immediately unlock and realise the value of the investment and assets in Pantasniaga.

“We aim to digitalise the local healthcare industry by building a seamless ecosystem that can influence the way medical services are being conducted,” he said.

Hong Seng added that the proposed disposal is expected to be completed by the third quarter of the year.

Shares in Hong Seng closed four sen or 5.13% higher to 82 sen on Friday, giving it a market capitalisation of RM4.19 billion.