KUALA LUMPUR (Aug 28): UEM Sunrise Bhd will be exiting the South African market with the proposed disposal by its indirect wholly owned subsidiary UEM Sunrise South Africa Proprietary Ltd of an 80.4% stake in Roc-Union Proprietary Ltd and claims of total shareholder advances worth 118.4 million rand (RM29.5 million).

The total shareholder advances were given by Roc-Union to UEM Sunrise South Africa Proprietary, which is wholly owned by UEM Sunrise Overseas Corp Sdn Bhd (UEMSOC).

In a filing with Bursa Malaysia on Monday (Aug 28), the property developer said that UEM Sunrise South Africa had entered into a sale of shares and claims agreement with Azishe Properties Proprietary Ltd for the proposed divestment.

“The decision to dispose of its entire equity in Roc-Union is in line with the company’s turnaround strategic plan, as it allows the company to realign its operations geographically, and redirect resources in businesses and areas which offer greater potential,” it said.

The proposed divestment is also in line with the group’s three-pronged turnaround strategic plan — "Triage", "Stabilise" and "Sustain". 

“The first phase, ‘triage’, is focused on activities to strengthen financial performance and the product portfolio, among others. It also includes streamlining core businesses to allow the company to transform into a balanced real estate player,” it said.

UEM Sunrise said that Azishe is required to pay 10% or 11.8 million rand (RM2.9 million) of the purchase consideration by way of a non-refundable deposit to the attorneys representing UEM Sunrise South Africa Proprietary within five business days from the date of the sale of shares and claims agreement or signature date (Aug 28).

Meanwhile, the balance of 90% or 106.6 million rand (RM26.6 million) will be paid by way of bank guarantee within 60 business days from the signing date.

Upon the completion of the proposed divestment, Roc-Union will cease to be a subsidiary of UEM Sunrise, while UEM Sunrise South Africa and UEMSOC will cease operations in South Africa.

UEM Sunrise South Africa Proprietary was registered as a private company in August 1994 in South Africa, under the Companies Act 2008, with principal activity in property development.

"Based on the audited consolidated financial statements of the company for the financial year ended Dec 31, 2022, the highest percentage ratio applicable to the proposed divestment pursuant to Paragraph 10.02(g) of the Main Market Listing Requirements of Bursa Malaysia Securities Bhd is 0.44%," it said.

It said that the conversions are based on the exchange rates published by the International Monetary Fund dated Aug 25, where 4.01 rand is equivalent to RM1. The actual recognition in ringgit is subject to the exchange rate at the point of recognising the sale and proceeds.

The group said that none of the group’s directors, major shareholders and/or persons connected to them had any interest, direct or indirect, in the proposed divestment.

At the close on Monday, shares in UEM Sunrise had risen 4.5 sen or 6.72% to 71.5 sen, giving the group a market capitalisation of RM3.62 billion.