Hextar Global is acquiring a chemical trading business whilst divesting its entire interest in its Consumer Products Segment to further streamline its operations to focus on its core chemicals businesses.
Under the Proposed Acquisition, Hextar entered into a share sale agreement to acquire 100% equity interest and obtain full
ownership of Hextar Industrial Chemicals Sdn Bhd from Hextar Holdings for a total consideration of RM10 million to be satisfied entirely in cash. The cash consideration will be funded through internally-generated funds. As HHSB is the largest shareholder of Hextar with a shareholding of 62.49%, the Proposed Acquisition is deemed a related party transaction.
However, the Proposed Acquisition will not require shareholders’ approval in accordance with the Main Market Listing Requirements. In addition to the Proposed Acquisition, the group is also undertaking the Proposed Divestment which will result in Hextar exiting the Consumer Products Segment. The segment consists of Halex Woolton (M) Sdn Bhd and Halex Marketing Sdn Bhd and will be divested to a non-related third party, for a total consideration of RM3.5 million pursuant to two share sale agreements dated 15 May 2023. This business segment has been recording losses due to stiff competition from foreign manufacturers and rising raw materials costs.
Madam Lee Chooi Keng, Hextar’s Executive Director, said, “Following our review of the performance and outlook of the Consumer Products Segment, the Board and management decided to exit this business segment and to reinvest and refocus its resources in the businesses which will provide Hextar with stronger profit growth. The Specialty Chemicals business has proven its potential for growth as demonstrated in its recent financial results.”