Friday 01 Dec 2023
By /
main news image

KUALA LUMPUR (April 28): PRG Holdings Bhd said its recent corporate exercise with Hong Kong-listed Furniweb Holdings Ltd will improve its financial liquidity and performance.

The exercise involving disposal and diversification plans is also part of its corporate strategy to increase its stake in Furniweb, according to a statement on Friday (April 28).

In its filing on Thursday, PRG said it intends to dispose of its 50 units of the Picasso Residence Condominium in Kuala Lumpur to PRG Land Sdn Bhd, a wholly owned subsidiary of Furniweb, which in turn is a 50.45%-owned subsidiary of PRG.

Furniweb is an investment holding company listed on the GEM of the Stock Exchange of Hong Kong Ltd, and its subsidiaries are engaged in elastic textile, webbing, rubber tape and polyvinyl chloride (PVC) related products as well as energy efficiency business.

The total disposal was valued at RM61.98 million to be paid via cash and issuance of new ordinary shares in Furniweb.

The group stated that RM6.2 million or 10% from the total disposal will be paid to PRG in cash within 14 days.

The remaining RM55.78 million will be satisfied with 329.07 million new Furniweb shares issued at HK$0.30 within 30 days, which will then increase PRG’s stake in Furniweb to 67.97%.

PRG then intends to use RM5.7 million from the cash proceeds for its working capital within 12 months, and it expects to gain RM3.01 million from the exercise.

“The proposed exercise will improve PRG Group’s financial liquidity immediately upon receiving the cash to be utilised as working capital,” the group said in the statement.

“In addition, the increase in equity interest in Furniweb would allow PRG to further consolidate its interest in Furniweb and enable PRG to facilitate easier decision-making and steer the direction of Furniweb’s operations,” it added.

Meanwhile, the exercise is also part of PRG’s diversification plan into property investment as Furniweb intends to utilise the properties for investment purposes.

The plan is expected to contribute 25% or more in net profits and/or be attributed to 25% or more of net assets.

“Given the financial performance of Furniweb, the board believes that the proposed exercise would further improve the financial performance of PRG Group,” read the statement.

PRG’s businesses include property development, construction, manufacturing and agriculture business.

It has expanded into the energy efficiency business by acquiring Singapore-based Energy Solution Global Ltd through Furniweb in 2021.

At noon break, PRG shares remained unchanged at 23.5 sen. Its market capitalisation stood at RM98.61 million.

Edited BySurin Murugiah
      Text Size