Wednesday 25 Dec 2024
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KUALA LUMPUR (Oct 26): Shareholders of Ancom Bhd gave the green light for the company to take over all the assets and liabilities of Nylex (Malaysia) Bhd for RM179.3 million (RM1 per Nylex share) at the group’s extraordinary general meeting (EGM) on Tuesday.

As Ancom currently holds a 50.3% stake in Nylex, the net amount payable to the latter will be RM96.7 million following the set-off arrangement for the 49.7% stake it does not own.

The acquisition will be satisfied via cash payment of RM50 million and the issuance of 31.1 million new Ancom shares valued at RM46.7 million (fixed at RM1.50 per Ancom share). 

Ancom noted that Nylex will retain RM15 million cash in the company and be classified as a cash company upon approval by the Securities Commission Malaysia. 

The balance of RM81.7 million sales proceeds will be distributed to all shareholders of Nylex, other than Ancom, via cash payout of RM35 million and consideration shares valued at RM46.7 million, said Ancom.

Ancom group chief executive officer Lee Cheun Wei said the path forward for the group is exciting as it emerges as one of the most integrated agricultural and industrial chemicals players in the region.

“The consolidation will allow for greater efficiency as we now have full control over the group’s manufacturing, distribution, and logistic functions. Moreover, it gives us the flexibility and potential to source, produce, store, and deliver a wider range of products. Besides that, we also expect other synergistic benefits such as economies of scale, corporate costs savings, and forming a stronger combined balance sheet,” said Lee.

With the anticipated recovery of the economy premised on the high vaccination rate and the relaxation of border restrictions as well as the rising commodity prices, Lee said the group is hopeful that the industrial chemicals division will improve going forward.

“On the other hand, the agricultural chemicals division is also expected to continue to register stronger performance with better spending power by the plantation sector owing to higher prices of various crops across the world,” he added.

At the EGM, Ancom shareholders also passed the resolution of the proposed change of name of the group from “Ancom Bhd” to “Ancom Nylex Bhd”.

Barring any unforeseen circumstances, Ancom said the proposed acquisition and the change of name are expected to be completed by the first quarter of 2022.

Ancom shares were down by 4.41% or 13 sen to RM2.82, giving it a market value of RM723.8 million. The stock has surged 182% year-to-date from RM1.

Nylex also fell 7.75% or 11 sen to RM1.31 with a market capitalisation of RM254.58 million. The counter has climbed 101% from 65 sen at the start of the year.

Edited ByKathy Fong
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