KUALA LUMPUR (Nov 4): Genetec Technology Bhd (KL:GENETEC) has proposed to sell its 51% stake in CLT Engineering Sdn Bhd (CLT) to its former executive director Tan Moon Teik for RM21.63 million cash.

Tan already controls the remaining 49% stake in CLT, comprising a 45% direct stake and 4% indirect stake through his spouse’s shareholdings.

Genetec, in a bourse filing, said it decided to sell the stake after taking into consideration CLT's declining revenue and unsatisfactory financial performance for the last three financial years caused by lower orders secured from customers in the hard disk drive and semiconductor-related products.

The group added that the disposal will also allow the group to realise the value of its investment in CLT and the cash proceeds raised will allow it to meet its funding requirement to purchase raw materials within the electric vehicle and energy storage segments.

Genetec said it has invested a total of RM31.25 million in CLT via the initial acquisition of the 51% stake for RM26.66 million in August 2010 and an additional share subscription in May 2014 for RM4.59 million.

Nevertheless, Genetec said the proposed disposal is expected to result in a pro forma gain of RM291,000, excluding the estimated transaction expenses of RM500,000.

The group said the selling price of RM21.63 million was derived from the 51% stake of adjusted net assets of CLT, which was determined by the net assets of CLT as at June 30, 2024 of RM31.92 million, plus a property revaluation surplus of RM10.49 million.

CLT specialises in parts fabrication and system assembly for the backend equipment for the manufacturing disk drive lines, semiconductor for the electrical and electronic industry.

The main property owned by CLT is a one-storey detached factory with a three-storey office annex sitting on two acres of industrial leasehold land.

CLT’s revenue has dropped from RM49.37 million in the 12-month period ending March 2022 to RM30.32 million in the 15-month period ending June 2024, while the company turned into a net loss of RM3.2 million in 2024, from a net profit of RM5.56 million in 2022.

Tan was previously one of the executive directors of Genetec and resigned from the board on Oct 2, 2023.
 
Shares in Genetec closed unchanged at 68.5 sen, giving it a total market capitalization of RM537.65 million. Year-to-date, the stock has fallen 70.9%.