Special dividend among options for proceeds from E&O stake sale, says Sime Darby

KUALA LUMPUR (March 30): Sime Darby Bhd is considering several options for the proceeds from the sale of its remaining 10.89% stake in Eastern & Oriental Bhd (E&O), including a special dividend to its shareholders.

The group today disclosed further information on the disposal, following an email query from Bursa Malaysia yesterday.

“All options remain open at this stage on the use of proceeds, which may be utilised for capital expenditure, loan repayment, working capital, or special dividend,” it said, in response to the bourse’s query on the utilisation of the RM93.5 million proceeds.

The bourse also requested further justification on the disposal consideration, to which Sime Darby said the offer price of 60 sen per share, which it received on March 15, was at a premium of 29% to its last closing price of 46.5 sen per share on March 12.

It added that the disposal will result in a reversal of impairment of approximately RM21 million based on the group’s carrying value of E&O as at Dec 31, 2020.

On March 26, E&O announced that Amazing Parade Sdn Bhd had made a mandatory takeover offer at 60 sen per share, after it acquired the stake from Sime Darby, which was 1.5 sen higher versus its closing price of 58.5 sen on the same day.

Amazing Parade is the private vehicle of Kerjaya Prospek Group Bhd co-founder and executive chairman Datuk Tee Eng Ho and his brother Tee Eng Seng. The offerors intend to maintain the listing status of E&O on the Main Market.

Sime Darby bought into E&O about a decade ago, in 2011. The group acquired a 30% stake in the company at RM2.30 per share or RM766 million from E&O managing director Datuk Seri Terry Tham Ka Hon and several other major shareholders of E&O.

In 2014, Sime Darby sold 110 million shares or a 9.9% stake back to Tham at RM2.90 per share or RM319 million. In 2016, it sold another 125.98 million shares or a 10% stake back to Tham at RM2.60 or RM342 million.

At midday break, Sime Darby rose three sen or 1.24% to RM2.45, giving a market capitalisation of RM16.67 billion.

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