KUALA LUMPUR (Dec 18): PTT Synergy Group Bhd (KL:PTT) is divesting its 70% stake in sanitary wares and tapware manufacturer Heap Wah Barakah Sdn Bhd (HWBSB) in a deal that is expected to result in a one-off loss of RM13.8 million.

The company said it is selling the stake in HWBSB for RM15 million to construction materials wholesaler HW Barakah Sdn Bhd.

The remaining 30% stake in HWBSB is held by Lum Pek Yoke (13.65%) and Lam Weng Wai (16.35%). Lum also holds a 50% stake in HW Barakah, according to PTT's bourse filing on Wednesday.

PTT said proceeds from the disposal will be used to fund the company's working capital for its property development and construction business.

“As PTT group expands its construction and property investment businesses, the company is of the opinion that it is an opportune time to undertake the proposed disposal as part of PTT’s business strategy to streamline and re-align entities within PTT group in order to create a leaner and efficient corporate structure,” said the building materials supplier.

According to PTT, the RM15 million price was determined on a willing buyer-willing seller basis. It factored in PTT’s cost of investment of RM2.5 million in HWBSB and PTT’s 70% share of net assets of RM27.7 million.

As of the end of September, PTT had RM22.93 million in cash and bank balances, along with RM34.9 million in deposits with banks. The company’s total borrowings stood at RM391.64 million, including RM131.46 million in short-term debt.

PTT shares gained two sen or 1.89% to close at RM1.08 on Wednesday, giving the company a market capitalisation of RM458.1 million.