KUALA LUMPUR (May 28): Mudajaya Group Bhd’s (KL:MUDAJYA) indirect unit proposes to dispose of a 45% stake in China-based cement manufacturer Real Jade Limited back to major shareholder Minyi Holdings Limited for HK$234 million (RM118.45 million) to settle debt owed by Mudajaya and its subsidiaries. Mudajaya's unit Xelmont Ltd bought a 100% interest in Real Jade from Minyi Holdings on Nov 9, 2022.

In a filing with Bursa Malaysia, the group said the transaction will settle debt owed to Minyi Holdings amounting to HK$244.97 million (RM124 million), mainly through a set-off arrangement, with the remaining HK$10.97 million balance to be paid in cash.

The deal is considered a related party transaction because Minyi Holdings is a major shareholder of Mudajaya. It holds a 11.76% interest in Mudajaya.

Mudajaya said its subsidiaries and the group owed a combined HK$244.97 million (RM124 million), including interest, to Minyi Holdings as of April 30, 2026.

As part of the proposed disposal of a 45% stake in Real Jade, all outstanding loans owed by Real Jade, Mudajaya and Xelmont will be transferred to Xelmont under an internal debt restructuring exercise.

The largest portion of the debt was HK$180.24 million owed by Real Jade, mainly linked to legacy debt before Xelmont acquired the company.

This was followed by Xelmont’s HK$19.82 million working capital loan it took from Minyi Holdings in October 2022 and Mudajaya’s RM22.73 million loan used to pay subcontractors for the LRT3 project.

Mudajaya had secured a RM655 million LRT3 contract in 2017 for works between Bandar Utama and Johan Setia. Although the project was completed in December 2025, about RM30.3 million was still owed to subcontractors. Mudajaya said the loan was used to settle repayments in the period from August 2024 to March 2025. 

The group said in its filing that selling a 45% stake in Real Jade is a strategic move to reduce debt and financing costs while still retaining control of the business and potential upside if market conditions improve. Mudajaya said the disposal will allow it to reduce cash outflow and save an estimated HK$13.56 million a year in interest expenses. Post- deal Mudajaya will retain a 55% interest in Real Jade.

Real Jade’s revenue has declined over the past three financial years, and it posted a net loss of HK$40.44 million for the year ended Dec 31, 2025, mainly due to weak demand in China’s cement and clinker market. Production volume fell sharply from about 398,000 tonnes in FY2024 to 196,000 tonnes in FY2025, affecting sales and profit margins.

The deal is subject to non-interest shareholder’s approval. SCS Global Advisory (M) Sdn Bhd has been appointed as the independent adviser for the deal. 

Mudajaya’s share price last traded at its 52-week low of 35.5 sen a share, valuing the company at RM188.7 million.