KUALA LUMPUR (Aug 2): XL Holdings Bhd (KL:XL) has scrapped its plan to acquire a 25% stake in Sabah-based Samajutera Sdn Bhd, which would have allowed the fish farming group to venture into seaweed cultivation.
The agreement the group signed in March to buy the stake from Ahmad Marzuki Nasir @ Abdu Salam and Wong Kiong Lien for RM15 million was terminated by mutual consent due to the non-fulfilment of conditions precedent in the agreement, said XL in a bourse filing on Friday.
Samajutera owns a 70% stake in WAF Holding Sdn Bhd, with the remaining 30% held by Inno Resource Development Sdn Bhd (IRD), a subsidiary of Innoprise Corp Sdn Bhd, the investment arm of Yayasan Sabah.
WAF Holding holds a concession for large-scale seaweed farming, aquaculture and eco-tourism on several parcels of land in Semporna, Sabah.
As part of the proposed investment, XL would have provided a five-year shareholder loan of up to RM15 million to WAF Holding for seaweed cultivation, with an initial disbursement of RM3 million.
In return, Ahmad Marzuki and Wong would have pledged 260,000 shares (26% of Samajutera) as security for the loan. If WAF Holding defaulted, XL would receive the pledged shares to settle the outstanding loan on a pro-rata basis.
XL Holdings, formerly known as Xian Leng Holdings Bhd, primarily engages in the commercial captive breeding of Asian Arowana, stingray and other ornamental fish. It also trades in aquarium tanks, accessories, fish feed, medication and distributes edible bird nests.
Shares in XL Holdings closed unchanged at eight sen on Friday, valuing the group at RM247.6 million.