KUALA LUMPUR (June 16): Copper wires and rods manufacturer Ta Win Holdings Bhd is disposing of its 32.5% stake or 3.9 million shares in pharmaceutical products manufacturer and distributor Royce Pharma Manufacturing Sdn Bhd for RM20.85 million.
Upon completion of the disposal, which is expected to be in the second quarter of financial year 2023, Ta Win will continue to account for investment in Royce Pharma as an associate company via its 1.08 million preference shares or a 1.35% stake.
According to a filing with Bursa Malaysia on Thursday (June 16), Ta Win's wholly-owned subsidiary Ta Win Copper Biohealth Sdn Bhd has inked a share sale agreement with Royce Pharma's shareholders Poly Laboratories Sdn Bhd and Jelita Serbaneka Sdn Bhd.
"The proposed disposal, [which] will be fully satisfied in cash, was arrived at on a willing buyer-willing seller basis. The proceeds to be received from the proposed disposal will be utilised as general working capital of Ta Win," the company said.
Ta Win said the disposal is to better realign the vision of becoming a prominent integrated one-stop copper solutions provider in the Southeast Asian region.
It added that the disposal would free up financial and operational resources to help it focus on strengthening subsidiary companies or seek other profitable copper-related business development opportunities.
Recall that in December 2020, Ta Win acquired a 32.5% stake in Royce Pharma for the same price tag of RM20.85 million.
"The acquisition of Royce Pharma in 2020 was intended to capitalise on the bottleneck and shortages in healthcare and pharmaceutical industry caused by Covid-19 pandemic back then. The bottleneck and shortages situation has subsided as Malaysia moved into an endemic phase.
"The proposed disposal [in 2022] represents an opportunity for Ta Win to dispose of its healthcare and pharmaceutical business segment for a pricing term which is no less than favourable (the disposal consideration is no less than its original cost of investment) in the current challenging operating environment," it said.
Ta Win's three major business segments are copper wire and cable, electrical and electronic and high-technological content signal, as well as power solutions.
Shares in Ta Win closed half a sen or 5.88% lower at eight sen on Thursday, giving the group a market capitalisation of RM258.55 million.