Sime Darby Berhad said it had entered into share sale agreements with SPG Bohaiwan Port Group Company Limited to divest its Weifang Port companies for RMB1.92 billion (approximately RM1.27 billion), marking its full exit from the non-core ports business.
In addition to the disposal consideration, its subsidiray Sime Darby HK will receive an indicative sum of RMB541 million (approximately RM357 million) as repayment of shareholder loans.
SPG Bohaiwan Port Group is part of Shandong Port Group Co. which was incorporated by the Shandong provincial government to consolidate port assets in the province.
SDB adds the proceeds from the sale will be utilised for future investments in the Group’s core businesses in the Industrial and Motors sectors, for capital expenditure andthe repayment of short-term borrowings.
The group has in recent years been progressively divesting assets that have been identified as non-core, as part of the Group’s efforts to streamline its portfolio and redeploy capital to support the growth of its core businesses of Industrial and Motors. These divestments include the disposal of a water management business in Weifang, interests in Tesco Malaysia, Eastern & Oriental Berhad, and three river ports in Jining.
“We are pleased that a major part of our non-core asset rationalisation plan has been achieved today with the sale of Weifang Port companies, the last of the businesses we own in the Logistics division. These last few years have been a challenge for the ports business, and we are grateful to the Shandong provincial government for finalising this agreement to enable us to unlock value which we can now channel towards growing our core businesses.”
“China remains one of our most important markets contributing almost 40 percent of revenue for the Group. The Industrial and Motors businesses there span 120 locations and 14 provinces. We look forward to channeling the proceeds we receive from this divestment into expanding and strengthening our position in the industrial and automotive sectors in China, as well as continue to scope for opportunities in other markets,” Sime Darby Berhad Group Chief Executive Officer Dato’ Jeffri Salim Davidson said.
The share sale agreements are expected to be completed by the fourth quarter of 2022.
