KUALA LUMPUR (Aug 22): Magna Prima Bhd is acquiring the remaining 30% stake in Magna Ecocity Sdn Bhd for a cash consideration of RM45.58 million.

In a bourse filing on Tuesday (Aug 22), Magna Prima said it had on Tuesday inked a sale and purchase agreement with Lee Shu Shun for the proposed acquisition. Magna Ecocity’s principal activity is property development.

Lee is a minority shareholder of Magna Prima, holding a 1.93% stake in the group, its 2022 annual report showed. 

Upon completion of the proposed acquisition, Magna Ecocity will become a wholly owned subsidiary of Magna Prima and it will be able to consolidate the earnings and net assets of Magna Ecocity from 70% previously to 100%.

Magna Prima said the proposed acquisition is in line with Magna Ecocity’s principal activities of property development and represents a strategic opportunity for the group to unlock the value of its investments for the benefit of the shareholders of Magna Prima.

It added that the proposed acquisition is expected to contribute positively to the group in the future given the favourable outlook and prospects of the property development industry, thus enhancing Magna Prima’s shareholders’ value in the medium to long term.

The acquisition will be entirely financed by bank borrowings and is expected to be completed in three months from the date of the agreement.

Shares price of Magna Prima closed down 1.5 sen or 3.53% to 41 sen on Tuesday, giving the group a market capitalisation of RM165 million.