ETA Group Bhd, formerly known as Rex Industry Bhd, has proposed to dispose of its entire stake in Rex Foods Sdn Bhd and a 38% equity interest in Indonesian canned food manufacturer PT Rex Canning for a combined cash consideration of RM22.73 million.
The company said it had entered into a share sale agreement with VIP Bonanza Sdn Bhd for the proposed disposals.
Under the agreement, ETA will sell 684 ordinary shares in PT Rex, representing a 38% stake, for RM14.04 million. It will also dispose of all 580,000 shares in Rex Foods for RM8.68 million.
Upon completion, PT Rex will remain a 62%-owned subsidiary of ETA, while Rex Foods will cease to be part of the group.
The proposed disposals are expected to result in an estimated pro forma loss of RM100,000.
ETA said the exercise forms part of its strategy to improve overall financial performance by reducing reliance on its food and beverage (F&B) business, which has historically been the group’s sole revenue contributor.
The company intends to progressively rebalance its earnings mix towards its property and construction business.
PT Rex, incorporated in Indonesia in August 1991, is principally involved in the manufacturing and export of canned food.
ETA has held an investment in PT Rex since July 1998, while its investment in Rex Foods dates back to September 1991.
The company said there would be no additional liabilities, including contingent liabilities, remaining with the group in relation to the proposed disposals, apart from its obligations under the share sale agreement.
