PRG Holdings Bhd (PRG) has entered into an internal reorganisation by transferring the 50 units of Picasso Residence condominium’s entitlement to its 50.45% owned Hong Kong-listed Furniweb Holdings Limited (Furniweb) for RM61.98 million via a combination of cash and Furniweb shares.
This exercise will see PRG’s stake in Furniweb increase to 67.97% and also diversify into the property investment business.
In a filing to Bursa on Thursday, PRG announced the internal reorganisation by transferring the 50 units of condominium’s entitlement to PRG Land Sdn Bhd (PRG Land), a wholly-owned subsidiary of Furniweb.
The 10% cash portion of RM6.19 million, shall be paid to PRG in cash within fourteen days from the date of the master agreement. PRG shall be utilising roughly RM5.7 million from this for its own working capital purposes.
The balance of RM55.78 million shall be paid to PRG by way of issuance of 329,068,636 new Furniweb shares at an issue price of HKD0.30 each within 30 days from the unconditional date.
The issuance of these consideration shares to PRG will see its stake in Furniweb increase to 67.97% upon the completion of the proposed exercise.
Listed on the GEM of the Stock Exchange of Hong Kong Limited (HKEX), Furniweb is principally engaged in investment holding. Its subsidiaries are principally engaged in the manufacturing and sale of elastic textile, webbing, rubber tape and polyvinyl chloride related products and energy efficiency business.
In a statement, PRG said that the transfer of the condominium units to Furniweb is part of the PRG Group’s corporate strategy to increase its stake in Furniweb.
With the condominium units the group will also diversify its business to include property investment and we believe this will bring in new income streams to Furniweb and the PRG Group as a whole.
With the manufacturing and energy efficiency business in Furniweb and the addition of property investment business, we believe this will form a strong base and bring positive earnings to shareholders.
The proposed exercise will improve PRG Group’s financial liquidity immediately upon receiving the cash to be utilised as working capital. In addition, the increase in equity interest in Furniweb would allow PRG to further consolidate its interest in Furniweb and enable PRG to facilitate easier decision-making and steer the direction of Furniweb’s operations.
Given the financial performance of Furniweb, the board believes that the proposed exercise would further improve the financial performance of PRG Group.
Presently, PRG is primarily engaged in property development, construction, manufacturing, and agriculture businesses. The company also expanded into the energy efficiency business by acquiring Singapore-based Energy Solution Global Limited, a new energy savings company, in 2021 through its 50.45% owned subsidiary, Furniweb Holdings Limited.
