This article first appeared in The Edge Financial Daily, on May 4, 2016.

KUALA LUMPUR: Nationwide Express Courier Services Bhd (NECSB) is planning an internal reorganisation involving the exchange of all its shares with a new investment holding company’s, Nationwide Express Holdings Sdn Bhd (NewCo).

The NewCo will then be listed on the Main Market of Bursa Malaysia, replacing NECSB, whose listing will be withdrawn, NECSB said in a bourse filing yesterday.

To effect the proposed reorganisation, NECSB and NewCo will enter into a share exchange agreement involving 60.1 million of RM1 NECSB shares with 120.2 million new shares of 50 sen apiece in the NewCo, it said, whereupon NECSB will become a wholly-owned unit of the NewCo.

Under the deal, NECSB shareholders, at the entitlement date, will exchange their shares with new NewCo shares on the basis of two new NewCo shares for every one NECSB share held.

The issue price of the new NewCo shares will be determined based on the par value of the NewCo shares of 50 sen.

As at April 27, NECSB has an issued and fully paid-up share capital of RM60.1 million comprising 60.1 million NECSB shares.

“The existing NewCo shares will continue to be held by the existing shareholders of NewCo, namely directors and shareholders Izman Ismi and Harani Khalid,” it said.

The creation of a separate listed entity would enable the NewCo to achieve ease and flexibility in its expansion to new business segments.

NewCo would also be able to acquire or expand to new businesses or explore investment opportunities that can be assumed separately from NECSB and other subsidiaries’ operational activities.

“The new corporate structure will also enable the business operations of the NECSB Group to be streamlined under NewCo.

“The segregation of the business divisions upon completion of the proposed internal reorganisation, will provide greater flexibility for the board of NewCo to manage its operations more effectively,” NECSB said.

The proposed exercise is expected to be completed in the fourth quarter of calendar year 2016.

NECSB and its subsidiaries are involved in express courier services, trucking services, freight forwarding, customised logistics services, mailroom management services, retail and warehousing.

The group is owned by BHR Enterprise Sdn Bhd (54.8%) and 45.2% by other shareholders. Its shares were not traded yesterday.