KUALA LUMPUR (April 20): NTPM Holdings Bhd (KL:NTPM) is exiting Vietnam in a related-party deal to dispose of its Vietnamese unit, NTPM (Vietnam) Co Ltd, for US$32 million (RM127.33 million) cash to Arch Peninsula Sdn Bhd (APSB), ending over a decade of loss-making operations in the country.

The proposed disposal marks the group’s full withdrawal from its Vietnam operations, which have been loss-making since 2012 and have weighed on its overall financial performance.

NTPM said its indirect wholly-owned unit, NTPM (International) Pte Ltd, had entered into a conditional agreement to dispose of its entire stake in the Vietnam-based subsidiary, according to a Bursa filing on Sunday.

The transaction is deemed a related-party transaction as APSB is a wholly-owned subsidiary of Premier Investment Ltd, a major shareholder of NTPM with a 22.42% stake.

Nishant Grover is the interested director while Premier Investment Ltd, Jackson Wijaya Limantara, Scotsdale Holding Ltd, Titan (MY) Sdn Bhd, PT Purinusa Ekapersada and PT Pindo Deli Pulp and Paper Mills are regarded as interested major shareholders in the transaction.

NTPM (Vietnam), which manufactures tissue and related products, contributed about 8.5% to the group’s revenue for the financial year ended April 30, 2025.

The disposal will allow NTPM to streamline its operations, eliminate ongoing financial commitments to the Vietnam business and redeploy resources to its core Malaysian operations.

As part of the deal, intercompany debt of approximately US$59.45 million (RM236.55 million) will be capitalised into equity prior to completion, strengthening the subsidiary’s balance sheet ahead of the transfer.

APSB will assume operational control of the Vietnam unit from May 1, pending completion, in an arrangement intended to ensure business continuity and limit further losses during the transition period.

Despite the strategic exit, the proposed disposal is expected to result in a pro forma net loss of about US$49.42 million (RM196.64 million), largely due to the derecognition of the group’s investment in the subsidiary.

NTPM plans to use the proceeds primarily to repay borrowings and support working capital requirements.

The transaction is subject to approval from non-interested shareholders at an extraordinary general meeting, as well as regulatory clearances in Vietnam.

Barring unforeseen circumstances, the disposal is expected to be completed by the end of 2026.

NTPM shares rose one sen or 4.9% to 21.5 sen at Monday’s midday break, valuing the group at RM241.49 million. The stock has declined about 50% over the past three years.