KUALA LUMPUR (Dec 10): DRB-Hicom Bhd (DRB-Hicom) has offered to sell to Pos Malaysia Bhd, in which it owns 32.21%, its KL Airport Services Sdn Bhd (KLAS) business and part of a freehold industrial land in Shah Alam, Selangor, for RM835.16 million, to consolidate its logistics business under Pos Malaysia.

The total disposal consideration of RM835.16 million in respect of the proposed disposals shall be satisfied via the issuance of 250.80 million new ordinary shares of RM0.50 each in Pos Malaysia to HICOM Holdings at an issue price of RM3.33 per share.

The issue price of the shares shall be adjusted in the event the market price of Pos Malaysia shares on a date closer to the signing of the sale and purchase agreements in relation to the proposed disposals, exceeds a 10% variance from the stipulated issue price.

In an offer letter posted on Bursa Malaysia today, DRB-Hicom said the disposal offers are conditional upon each other and shall only be implemented after two parcels of agriculture land measuring 100 acres in Bandar Kota Perdana, Kubang Pasu, Kedah — currently held by Konsortium Logistik Bhd, a unit of KLAS — are transferred to Hicom Vertex Sdn Bhd, an indirect wholly-owned unit of DRB-Hicom.

It is also dependent on the capitalisation of an existing loan facility obtained by KLAS of up to RM370 million, and a non-current inter-company amount owing by KLAS to DRB-Hicom of about RM182.9 million, via the issuance of new KLAS shares at par value to Hicom Holdings.

KLAS is offered for sale at RM766.16 million, though the final price will be subject to adjustments, if any, based on the difference in the outstanding amount of the KLAS loan facility (RM286.8 million as at Aug 31), with the outstanding amount prior to the completion date of the proposed disposals.

As for the freehold industrial tract also on sale, it is located in Section 28, Shah Alam, and measures 9.91 acres; its price tag is RM69 million. The land has been approved for the development of 30 units of semi-detached factories and two units of detached factories.

DRB-Hicom said the disposals will allow the group to streamline, improve its operational efficiency and enhance the synergies between the various business segments within its postal and logistics businesses, currently managed under Pos Malaysia and the KLAS Group respectively, by consolidating the logistics business under Pos Malaysia.

“The proposed disposals are also expected to improve the medium to long-term earnings potential of Pos Malaysia and its subsidiaries,” it added.
 
The proposed disposals will not change the existing postal businesses of Pos Malaysia, but will complement and strengthen the ecosystem of the logistic businesses of Pos Malaysia and the DRB-HICOM group of companies, it noted.
 
DRB-HICOM and persons acting in concert with it (PACs), including HICOM Holdings, intend to seek an exemption from the Securities Commission Malaysia (SC) from the obligation to undertake a mandatory takeover offer for the remaining Pos Malaysia shares not already owned by them, after the proposed disposals.
 
The offer for sale is subject to relevant regulatory approvals, besides the approval of Pos Malaysia and DRB-Hicom’s shareholders.
 
DRB-Hicom closed unchanged at RM1.21 for a market capitalisation of RM2.34 billion today; while Pos Malaysia dipped 8 sen or 2.64% to close at RM2.95, for a market capitalisation of RM1.58 billion.

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