Propel Global Berhad (Propel Global) announced the disposal of its 55% equity interest in Propel Chemicals Sdn Bhd (PCSB) to Hextar Kimia Sdn Bhd (HKSB) for a cash consideration of RM9.075 million.
Alongside this, Rancak Nikmat Sdn Bhd and Wiramas Baiduri Sdn Bhd will also dispose of their collective 45% stake in PCSB, formerly known as Daya Secadyme Sdn Bhd, to HKSB for RM7.425 milion.
Propel Global group chief executive officer and executive director Angelina Lee said the decision to pursue the disposal is driven by PCSB’s three-year financial losses and its struggles as a smaller player in the specialty chemicals market.
This is while competing against larger rivals with scale advantages, Lee said.
“This divestiture represents a strategic move to exit an unprofitable venture with limited growth prospects,” she said.
She added: ” Our future plans are robust and highly optimistic. We are dedicated to our core business as an oil and gas and construction service provider, with a strong focus on our engineering and technical expertise.
“This not only upholds our excellence in the oil and gas sector but also positions Propel Global as a one-stop integrated solutions provider across industries. We are confident that this strategy will result in exceptional value for our clients and sustained profitability for the group.”
For the financial year ended 30 June 2023, Propel Global has recorded revenue and profit before tax (excluding other income) standing at RM110.9 million and RM7.0 million respectively.
The previous year, the company loss before tax (excluding other income) of RM19.9 million and a revenue of RM77.6 million.
“Three consecutive quarters of profitability signal that the Group is on the right track and reflect its financial resilience and strategic focus,” the company said.
