KUALA LUMPUR (Jan 31): DRB-Hicom Bhd’s wholly-owned unit PHN Industry Sdn Bhd has acquired Oriental Summit Industries Sdn Bhd (OSI) for RM23.9 million from Hicom Holdings Bhd (HHB).

In a filing with Bursa Malaysia today, DRB-Hicom said the acquisition is part of an internal reorganisation that would enable the streamlining of common manufacturing activities undertaken by PHN and OSI.

The activities to be streamlined include metal stamping, welding and sub-assembly of metal components resulting in potential cost savings for the DRB-HICOM group.

The cash consideration is based on HHB’s carrying value of investment in OSI as at May 31, 2016.

PHN is a 62.5%-owned subsidiary company of HHB. The remaining 37.5% equity interest in PHN is owned by Proton Holdings Bhd.

HHB and Proton are both wholly-owned subsidiary companies of DRB-Hicom.

In another filing, DRB-Hicom’s indirect wholly-owned subsidiary Edaran Otomobil Nasional Bhd (EON) plans to divest Multi Automotive Service and Assist Sdn Bhd (MASA) to streamline its business.

EON entered into a share sale agreement (SSA) with Vikneswaran Suppiah for RM1.

Vikneswaran is the operation manager of MASA.

The sum was arrived based on a willing buyer-willing seller after considering the unaudited shareholders’ deficit of RM180,000 as at Dec 31, 2016 and net loss of RM660,000 in MASA for its nine-month period ended Dec 31, 2016.

It also considered the audited shareholders’ funds as at March 31, 2016 and net profit for the financial year ended March 31, 2016 of about RM630,000 and RM170,000, respectively.

“EON has fully recovered its entire cost of investment in MASA of RM425,000 via receipt of dividends from MASA,” it added.

The proposed divestment is in line with DRB-Hicom’s intention to streamline its operations by divesting insignificant businesses and to focus on its core businesses.

The principal activities of MASA are membership recruitment incorporating the provision of emergency roadside assistance, and the supply of auto related products and services.

EON distributes and retails motor vehicles and their related spare parts and servicing of motor vehicles and investment holding.

In a third filing, DRB-Hicom said EON would dispose of its 100% interest in DRB-Hicom Leasing Sdn Bhd (DLSB) to DRB-Hicom EZ-Drive Sdn Bhd for RM14.97 million, which is based on DLSB’s unaudited tangible assets on Aug 31, 2016.

The consideration of RM14.97 million will be satisfied by the issuance of new shares in EZ-Drive to EON.

DLSB and EZ-Drive are wholly-owned subsidiaries of EON, which is a wholly-owned unit of HHB.

EZ-Drive is the franchise holder of the AVIS brand in Malaysia and operates short-term leasing, long-term leasing and retail car rental business.

The principal business of DLSB is engaging in the leasing of passenger and commercial vehicles.

“Upon completion of the proposed internal reorganisation, DLSB will become a wholly-owned subsidiary company of EZ-Drive,” DRB-Hicom said.

The reorganisation will enable EON to consolidate its vehicle rental and leasing business under one roof to achieve greater operational efficiency and cost savings, contributing positively to DRB-Hicom’s future earnings, the filing said on the rationale for the exercise.

DRB-Hicom dipped one sen or 0.85% to close at RM1.17, valuing it at RM2.3 billion.