KUALA LUMPUR (July 22): Protasco Bhd (KL:PRTASCO) will dispose of its 100% stake in Ikram Education Sdn Bhd, which owns the Infrastructure University Kuala Lumpur (IUKL), to Hong Kong-based Star Teenagers International Group Ltd (STI) for RM30 million.
Prostasco, which has businesses ranging from hotel to engineering, via Kumpulan Ikram Sdn Bhd, has signed a sale and purchase agreement (SPA) with STI for the cash disposal, its filing on Sunday (July 21) showed.
Shares of Protasco dropped as much as six sen or 16.7% to 30 sen on Bursa Malaysia on Monday, with more than 14 million shares exchanging hands. The counter last traded at 34.5 sen, still down 1.5 sen or 4.17%.
Trading in Protasco’s shares was suspended for an hour in early trade on Monday, amid the material announcement.
The proposed sale came about after Protasco received an offer from STI to acquire Ikram Education, back in May this year. It did not disclose the transaction price at the time. Despite Monday’s decline, Protasco’s shares are still up 46.8% this year.
Protasco is expecting to gain RM12.7 million from the proposed disposal and improve the group’s earnings for the financial year ending Dec 31, 2024 (FY2024).
The deal is scheduled to be completed by Nov 20 this year.
Protasco plans to use the proceeds from the disposal to pay Ikram Education’s liabilities, defray expenses, and as working capital.
“The proposed disposal provides an opportunity for the company to unlock and monetise its investment in Ikram Education, taking into consideration that the operations of Ikram Education is not considered an essential segment of Protasco and its subsidiaries,” it said.
Ikram Education has been loss-making with a net loss of RM5.30 million in FY2021, RM15.63 million in FY2022, and RM8.37 million in FY2023.
At the group level, Protasco reported a turnaround with a net profit of RM6.48 million in FY2023, compared to a net loss of RM29.38 million in FY2022. Revenue surged 28% to RM1.13 billion, from RM883.94 million.