KUALA LUMPUR: FGV Holdings Bhd (FGV) yesterday inked an equity transfer agreement with Grand Industrial Holding Co Ltd (GIH) for the divestment of its 100% stake in FGV China Oils Ltd (FGVCO) for RMB165 million (RM100 million).
GIH is a China-incorporated entity listed on the Shenzhen Stock Exchange. FGVCO’s shareholder funds as at Dec 31, 2018 amounted to RMB107 million, said FGV in a statement today.
FGVCO is FGV’s wholly-owned subsidiary located in Dongguan, China.
It is principally involved in the processing, refining, storage and marketing of edible oils for the China market.
FGVCO has been incurring losses due to market disparity arising from competition from regional suppliers.
The disposal will not have any material impact on FGV’s current China business or its strategic plans for the China market, it said.
In a filing with Bursa Malaysia, FGV said the proposed disposal of FGVCO was in line with its transformation plan to divest non-performing assets and to focus on maximising returns from core and performing businesses.
The proceeds from the proposed disposal will be used for the general working capital requirements of the company.
It said the proposed disposal is not expected to have any significant impact on the earnings per share of FGV Group.
FGV expects the disposal to be completed between the end of 2019 and the first quarter of 2020.