KUALA LUMPUR (March 11): CB Industrial Product Holdings Bhd (CBIP) has acquired the remaining 30% stake or 30 million shares in biofuels producer Gulf Lubes Malaysia Sdn Bhd (GLM) for RM24 million in cash.
In a bourse filing on Friday (March 11), CBIP said it had entered into a share sale agreement with the shareholders of GLM, namely Satyanarayana Jampa Veera Venkata, Ramalingam Karuppaiah and Mogahid Taha Yassin. The trio have a 10% stake each in GLM.
“Upon completion of the proposed acquisition, GLM will become a wholly-owned subsidiary of CBIP and enable the company to plan and set direction of GLM to align with the interest of CBIP group so as to achieve any potential synergy among the group of companies as well as to resolve the management deadlock in GLM as announced on June 30, 2020.
“The company had previously on June 11, 2020 filed a winding-up petition against GLM. The winding-up petition is a contributories winding-up petition based on just and equitable grounds caused by the deadlock arising from the dispute between the shareholders,” it explained.
GLM’s business activity is principally involved in extracting, refining, exporting, importing and trading of oil and gas, namely biodiesel.
GLM owns a biofuels processing facility on a land size of approximately eight acres located at the Port Klang Free Zone in Pelabuhan Klang, Selangor. The biofuel processing facility includes two biodiesel processing plants with an annual production capacity of 350,000 metric tonnes (MT), as well as a refined, bleached and deodorised palm oil processing plant with an annual production capacity of 250,000 MT.
However, the biofuels facility will require refurbishment before commencing its maiden production as the facility was left idle since its construction in 2009. GLM has yet to commence any operation.
CBIP expects the proposed acquisition to be completed by the end of the second quarter or early of the third quarter of 2022. The purchase sum will be funded entirely by internal generated funds.
Shares in CBIP closed three sen or 2.03% lower at RM1.45, bringing it a market capitalisation of RM715 million.