KUALA LUMPUR (June 26): The cut-off date for the proposed disposal of Kuchai Development Bhd’s (KL:KUCHAI) assets and liabilities to Sungei Bagan Rubber Company (KL:SBAGAN) in return for a 29.37% stake in Sungei Bagan has been extended by four months to October 29.
The two companies on Wednesday signed a supplemental letter for the extension, according to Kuchai and Sungei Bagan's filings with the stock exchange, which did not specify the reason for the extension.
The extension includes a further two-month automatic extension to December 29 if the conditions precedent (CPs) in the deal are not fulfilled or waived, according to Kuchai and Sungei Bagan’s filings with the stock exchange.
Among the CPs are that both Kuchai and Sungei Bagan have to obtain the approval of their shareholders, and Sungei Bagan has to be satisfied with the results of Kuchai's due diligence. Kuchai also has to obtain all necessary consent and approvals for the disposal of the assets and liabilities, including from governmental authorities, financial institutions and relevant third parties as required by contractual agreements or deemed necessary by Sungei Bagan.
On May 7, Kuchai's shareholders approved the proposed asset and liability transfer to Sungei Bagan. The exercise, announced last December, is part of efforts to consolidate the assets of the two sister companies linked to Kluang Rubber Company (M) Bhd (KL:KLUANG).
Kuchai's assets include a freehold commercial property in Emerald Hill Road, Singapore, freehold agricultural land in Ulu Semenyih, Singapore dollar bonds, US dollar redeemable preference shares, equity instruments on the Singapore Stock Exchange, and other receivables totalling RM275.5 million.
It was reported that the most valuable of its assets is a block of 3.032 million shares in Singapore-listed Great Eastern Holdings Bhd, the largest and oldest life insurance company in Singapore and Malaysia.
Two days after Kuchai's shareholders approved the deal, Oversea-Chinese Banking Corp Ltd (OCBC) — which already had an 88.45% stake in Great Eastern — made a general offer to mop up the rest of the 11.56% it did not own in the insurance company at S$25.60 per share. The deal priced the 3.032 million shares that Kuchai held at an estimated S$77.6 million (RM271.7 million).
Kuchai shares closed one sen or 0.46% lower to RM2.15 on Wednesday, giving it a market value of RM266.06 million. The stock has gained over 15% since it approved the asset injection.
Sungei Bagan shares, meanwhile, rose four sen or 0.63% to end at RM6.40 on Wednesday, valuing it at RM424.53 million. The counter has gained over 30% since May 7.