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KUALA LUMPUR (Feb 27): Sime Darby Bhd’s proposed pure-play strategy involving the creation of three listed entities also entails the restructuring of the group’s borrowings, transferring of certain assets within the group and the capitalisation of inter-company loans.
Following this internal restructuring, the group will distribute its 100% stakes in Sime Darby Plantation Sdn Bhd and Sime Darby Property Bhd to entitled shareholders, Sime Darby said in a filing with Bursa Malaysia today.
It added that on completion of the distribution, the shareholders will directly hold shares in Sime Darby Plantation and Sime Darby Property in the same proportion as their shareholdings in Sime Darby.
Sime Darby Plantation and Sime Darby Property would need to seek admission into the official list of Bursa Securities, and the quotation of their entire issued share capital. It would include all the new shares to be issued after the internal restructuring.
Accordingly, there will be three separate and independent listed entities with distinct businesses, with Sime Darby Plantation and Sime Darby Property to undertake the current plantation and property businesses of Sime Darby.
Sime Darby itself would remain listed with the trading business comprising motors and industrial, logistics business, and other businesses including healthcare, insurance, retail and investments.
Sime Darby said the proposed listing would accelerate the growth on the back of the benefits from a pure-play strategy.
Sime Darby said the exercise would ensure better focus on capital management and growth strategies, unlock value for entitled shareholders and greater investor choice, and enhance investor awareness.
Based on Sime Darby’s latest audited financial statements for the financial year ended June 30, 2016, the audited profit of the plantation and property groups amount to 41% and 32% of the audited consolidated profit after tax attributable to the owners of Sime Darby, respectively.
Sime Darby had announced the proposal to create three pure play stand-alone businesses in the plantation, property and trading and logistics sectors on Jan 26.
Sime Darby president and group chief executive officer Tan Sri Mohd Bakke Salleh had said that each business will bear the Sime Darby name in order to carry on the heritage since the conglomerate’s listing in 1980.
He highlighted that Sime Darby was mandated to develop Malaysian champions by incubating businesses in key growth sectors.
“Once businesses had achieved critical size and capacity, they were spun off and listed on the stock market. Not only did this benefit shareholders, it allowed the companies to tap into the capital market for growth,” he said then.
Sime Darby shares were unchanged today at RM9.20 in early afternoon trading, with a market capitalisation of RM62.5 billion. — theedgemarkets.com
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