KUALA LUMPUR (Dec 15): In his latest move, agrochemical businessman Datuk Eddie Ong Choo Meng, who has been very active in the local corporate scene, has injected Hextar Mitai Sdn Bhd (HMT) — an engineering solutions company controlled by his family — into ACE Market-listed Hextar Industries Bhd in a related party transaction (RPT).
Hextar Industries has on Friday announced that the group is expanding its presence in the industrial products division by acquiring a 70% stake in Klang-based HMT from its major shareholder Hextar Holdings Sdn Bhd for RM4.55 million in cash.
Hextar Holdings, which controls a 55.69% stake in Hextar Industries, is a private vehicle that is jointly-owned by Eddie Ong and his parents, namely Datuk Ong Soon Ho and Datin Teoh Siew Yoke @ Teoh Siew Chin.
Before the asset injection, Hextar Holdings owned the 70% stake in HMT, which specialises in engineering solutions across a wide range of industries including oil and gas, food and beverage, as well as aerospace.
The remaining 30% stake in HMT is held by its founder and managing director Ke Tung Chen.
Hextar Industries told Bursa Malaysia that the purchase price of RM4.55 million was determined based on 70% of the net assets of HMT of RM6.5 million based on the last audited financial statement as at end-December 2022.
Meanwhile, Hextar Industries managing director Benny Ang highlighted that the acquisition of HMT — with a track record of over 15 years in successfully completing projects — will provide the group with immediate access to specialised engineering capabilities to complement its existing businesses.
“We will also be able to leverage on the wider group’s client base to achieve greater synergies. Ke Tung Chen will continue to serve as managing director of HMT thus ensuring continuity in management,” he said in a separate statement.
Hextar Industries executive director Alex Sham pointed out that HMT is actively engaged in environmental sustainability and waste management initiatives, exemplified by its successful project awarded by the United Nations Industrial Development Organisation (Unido) to eliminate polychlorinated biphenyls (PCB) in Indonesia.
“HMT partnered with Ecolsir s.r.l from Italy on this project which destroys PCB, as well as rejuvenates treated oil to be used as fresh transformer oil for electrotechnical applications (mineral insulating oils).
We believe that the acquisition and the related environmental considerations are an essential social responsibility to achieve long-term business success,” Sham commented.
Not the first RPT
Hextar Industries — formerly known as SCH Group Bhd — is mainly involved in the manufacturing and formulation of bulk blend, mixture and compound fertilisers, trading of various fertilisers as well as providing crop management solutions.
The group also supplies various industrial products such as machinery, spare parts, conveyor belts, forklifts, industrial batteries, lighting, manufacturing of quarry crusher screens for the use in the quarry industry and providing outdoor equipment rental services for chillers, tents and power generators.
It is worth noting that the latest acquisition of HMT is not the first RPT involving Hextar Industries and the Ong family’s Hextar Holdings.
In August 2022, Hextar Industries announced its plan to buy a 100% stake in Hextar Fertilizers Ltd from Hextar Holdings for RM480 million in an all-shares deal.
Year to date, shares of Hextar Industries have tumbled by 51% to close at 38.5 sen on Friday, giving it a market capitalisation of RM1.04 billion.
Just last Wednesday (Dec 6), Eddie Ong had emerged as a substantial shareholder in Hektar Real Estate Investment Trust (Hektar REIT) after acquiring a 28.46% stake in the company.
Other than Hextar Industries and Hektar REIT, he is also a major shareholder Hextar Global Bhd (formerly known as Halex Holdings Bhd), Hextar Healthcare Bhd (formerly known as Rubberex Corp (M) Bhd), Hextar Technologies Solutions Bhd (formerly known as Complete Logistic Services Bhd), Hextar Capital Bhd (formerly known as Opcom Holdings Bhd), Classic Scenic Bhd (to be renamed Hextar Retail Bhd), as well as KIP REIT and Perak Transit Bhd.
Subsequently, Classic Scenic, a Rawang-based wooden picture frame mouldings manufacturer, had on Dec 12 proposed to acquire a 51% stake in shoe and clothing company Redina Malaysia Sdn Bhd for RM35.7 million in cash.