ECM Libra Group Berhad’s 30.0%-owned associate company, Positive Carry Sdn Bhd had entered into a conditional sale and purchase agreement with Enzo II Holdings Pte Ltd part of a Singapore-based private equity firm – to dispose of all the 24,000,000 ordinary shares it owns in TYK Capital Sdn Bhd.
The parties to the SPA are all existing shareholders of TYK – collectively being the sellers disposing of their interests in TYK – and the Buyer who will be purchasing the said interests. The sale consideration payable for the Positive Carry Disposal will be in cash in the amount of RM120,000,000, payable in full upon completion. The completion of the SPA is conditional upon certain conditions to be fulfilled by parties to the SPA on or before 31 October 2023 or such other extended period as provided in the SPA. On completion of the Positive Carry Disposal, Positive Carry shall cease to be a shareholder of TYK.
ECM’s 30.0% share of the Sale Consideration will be RM36,000,000 and the effective equity interest in TYK is 8.1% (being 30.0% of the 27.0% equity interest owned by Positive Carry). The Company’s disposal of its effective equity interest of 8.1% in TYK pursuant to the Positive Carry Disposal is expected to result in Group’s share of profits of approximately RM26,861,000 which derives from the difference between the Group’s share of the Sale Consideration of RM36,000,000 and the carrying value of 8.1% effective equity interest of the Group in TYK of RM9,139,000 as at 31 December 2022.
The ECM Board is of the view that the disposal is in the interest of the Company as it will enable the Company to realise the value of investment outside its core focus area of hospitality after a 11-year holding period; (ii) improve the cash flow of the Group; (iii) provide liquidity for new investments and initiatives that will enhance shareholder value; and (iv) provide additional working capital for the Group’s operations.
