KUALA LUMPUR (Nov 27): Widad Group Bhd, whose share price closed today at a two-year high of 50.5 sen, wants to take over Menang Corp (M) Bhd’s concession on management and maintenance of UiTM Seremban 3 campus in Negeri Sembilan for RM122 million cash.
The concession, which manages UiTM Seremban 3 campus in Negeri Sembilanis, is housed under Menang’s subsidiary Inovatif Mewah Sdn Bhd.
Menang announced to the stock exchange that a Heads of Agreement (HoA) has been executed today between Widad Group and Innovatif Mewah’s shareholders who are Menang’s two wholly-owned subsidiaries — Menang Development Sdn Bhd (MDSB) and Menang Industries (M) Sdn Bhd (MISB) plus minority shareholder, Tentu Selesa Sdn Bhd.
Under the agreement, MDSB and MISB will dispose of its 71% equity interest in Innovatif Mewah, while Tentu Selesa will let go of its 29% equity interest subject to terms and conditions of a share sale and purchase agreement which will be entered into later.
With the effective 71% stake, Menang is expected to receive RM86.62 million from the divestment, or 18 sen per share based on share capital of 480.8 million.
The announcement confirms The Edge Malaysia Weekly’s report which quoted sources saying that Menang Corp is in talks with parties to sell its concession businesses.
Menang, via Inovatif Mewah Sdn Bhd, built the facilities and infrastructure and carries out maintenance work on the UiTM Seremban 3 campus in Negeri Sembilan under the concession agreement signed in May 2010. Innovatif Mewah currently has a remaining concession period of 14 years until 2034.
Menang said today its board believes the proposed disposal is timely and “provides the group with an opportunity to monetise its concession asset at a reasonable price”.
It said the proposed disposal, which is expected to be completed within seven months, will also help strengthen the company’s financial position by lowering its gearing and provide working capital.