KUALA LUMPUR (April 9): Logistics service provider Arka Bhd (KL:ARKA) has proposed to dispose of its entire 40% equity interest in information technology associate Enfrasys Solutions Sdn Bhd for RM43 million cash.

In a Bursa Malaysia filing, Arka said the disposal to investment holding firm Joy Jewel Sdn Bhd — whose directors are Ahmad Abdullah and Farah Ahmad — is expected to generate an estimated pro forma gain of RM9.1 million.

The RM43 million consideration reflecte a price-earnings multiple of about 5.9 times based on Arka’s share of Enfrasys’ earnings for the financial year ended Dec 31, 2024. This represents a discount of 23.4% to the average valuation multiples of comparable listed peers, which the board deemed reasonable given the non-controlling nature of the stake.

Arka plans to channel RM13 million of the proceeds into expanding its logistics division, including the purchase of trucks, trailers and warehouse facilities. Another RM10 million has been earmarked for potential investments to complement its logistics and tyre businesses, while RM17.35 million will be allocated for general working capital, covering staff costs, fuel, maintenance and procurement.

The disposal forms part of Arka’s strategy to monetise non-core investments where it lacks operational influence, and to redeploy capital into core businesses aligned with long-term growth. While Enfrasys has contributed significantly to revenue, Arka views the investment as passive due to its minority stake.

Financially, the transaction is expected to strengthen Arka’s net asset position and turn the group from a loss to a profit on a pro forma basis.

 The deal, however, remains subject to shareholder approval at an extraordinary general meeting and regulatory consents, with completion targeted by the second quarter of 2026.

 Arka cautioned that risks include potential non-completion if conditions precedent are not met, and contractual liabilities tied to warranties under the agreement. It also acknowledged the loss of future earnings contributions from Enfrasys, though it expects redeployment of capital into logistics to underpin future growth.

Shares in Arka closed unchanged at 60 sen on Thursday, valuing the company at RM39.55 million. Over the past one year, the stock has declined 53.8%.