KUALA LUMPUR (Sept 6): Stella Holdings Bhd on Wednesday said it has secured loan facilities of up to RM101 million from AmBank (M) Bhd.
The facilities include a term loan of up to RM100 million to partially finance the group’s acquisition of construction firm Pembinaan Teguh Maju Sdn Bhd (PTM) for RM380 million.
The second loan facility of up to RM1 million will be used to finance the reducing term assurance/level term assurance/keyman insurance premium, to cover the life of the group’s directors, key management, shareholders and appointed nominees. Any unutilised portion of the loan will be cancelled.
Stella said both term loans have a tenure of up to 36 months from the first business day of the following month from the date of first drawdown.
“The utilisation of the term loan facilities is subject to the approval of the proposed acquisition by the company’s shareholders at an extraordinary general meeting to be convened at a later date to be announced,” the group said in a bourse filing.
Stella recently announced its plans to acquire PTM in a related party transaction. The RM380 million purchase consideration will be paid using the term loan from AmBank (RM100 million) and the issuance of 350 million new shares at an issue price of 80 sen per share.
The proposals are expected to be completed by the fourth quarter of 2023. Upon completion, Stella will hold a 100% equity interest in PTM.
The acquisition of PTM comes with a profit guarantee provided by the vendors, who are among Stella's directors. They have guaranteed that the profit after tax of PTM for the financial year ending June 30, 2024 (FY2024), FY2025 and FY2026 will not be less than RM120 million on an aggregate basis
Stella’s share price closed half sen or 0.63% higher at 80.5 sen on Wednesday, valuing the group at RM53.94 million.