KUALA LUMPUR (Dec 3): Cycle & Carriage Bintang Bhd will cease to be a substantial shareholder of Mercedes-Benz Malaysia Sdn Bhd, after disposing of 66 million or 49% MBM shares to Daimler AG for RM66 million.
“Following Daimler’s exercise of the call option, Cycle & Carriage will cease to be entitled to the annual dividend from Mercedes-Benz Malaysia of RM11.2 million, even when Mercedes-Benz Malaysia declares a dividend,” Cycle & Carriage said in a filing with Bursa Malaysia.
Cycle & Carriage said it received a notice dated Nov 30 from Daimler in relation to the latter exercising its call option on the 66 million shares currently held by Cycle & Carriage.
“The exercise of the call option requires at least 12 months’ prior written notice by Daimler to Cycle & Carriage, which has been given by Daimler on Nov 30. Upon expiry of such notice period, being 30 November 2019, Cycle & Carriage shall deliver the Mercedes-Benz Malaysia shares to Daimler and Daimler shall pay to Cycle & Carriage the total consideration for the Mercedes-Benz Malaysia shares, being RM66,003,000 (option price),” the company said.
Cycle & Carriage is not expected to have any gain or loss from the disposal.
The proceeds from the disposal are expected to be utilised for working capital, repayment of bank borrowings of Cycle & Carriage Group, network infrastructure, and/or for such other purposes as deemed appropriate by the company, the filing added.
Following the disposal of MBM shares, Cycle & Carriage reiterated that the disposal will not directly impact any of its trading operations, trading performance or its support of customers.
The company said it continues to be a leading Mercedes-Benz dealer group in Malaysia, with 13 sales and after sales facilities across the country to serve Mercedes-Benz customers.
In a separate statement, Cycle & Carriage chief executive officer Wilfrid Foo said: “Cycle & Carriage would like to assure all our customers that the recent decision by Daimler to exercise their call option on the company’s holding in Mercedes-Benz Malaysia will not impact our commitment or ability to continue delivering exceptional experiences to our customers across our nationwide dealerships in Malaysia.
"All dealerships will continue to provide you with quality sales and after sales services, in accordance with the strictest Mercedes-Benz quality standards supported by Mercedes-Benz Malaysia.”
At 12.30pm, Cycle & Carriage shares fell seven sen or 3.61% at RM1.87, valuing it at RM195.44 million. The counter saw 33,100 shares traded.