KUALA LUMUR: Sime Darby Bhd
, which is undertaking an internal corporate exercise to create three listed entities – plantation, property, and trading & logistics sectors – will restructure the borrowings, transfer of certain assests and capitalise inter-company loans.
Sime Darby said on Monday it would engage various parties, including but not limited to rating agencies, lenders and creditors of the group, to ensure that an optimal capital structure is achieved for the identified entities and Sime Darby.
After the internal revamp, Sime Darby will undertake to distribute the group's entire shareholding in Sime Darby Plantation Sdn Bhd and its entire shareholding in Sime Darby Property Bhd to the entitled shareholders.
“Upon completion of the proposed distribution, the entitled shareholders will hold directly such number of Sime Darby Plantation shares and Sime Darby Property shares in the same proportion as their shareholdings in Sime Darby as determined as at the said entitlement date,” it said.
Recall that on Jan 26, Sime Darby announced that its board had approved in-principle a plan to pursue a pure-play strategy involving the creation of standalone listed entities in the plantation, property, and trading & logistics sectors on the Main Market of Bursa Malaysia Securities Berhad.
“The objective is to unlock sustainable value for Sime Darby,” it said.
Sime Darby said with the proposals, there will be three separate and independent listed entities with distinct businesses with Sime Darby Plantation and Sime Darby Property to undertake the current plantation and property businesses of the Sime Darby Group respectively.
Sime Darby will remain listed on the Main Market of Bursa Securities and its core businesses are trading comprising of motors and industrial; logistics; and other businesses comprising of healthcare, insurance, retail and other investments.
It said the proposed exercise would enable the identified entities to accelerate their growth on the back of the benefits expected to be derived from a pure-play strategy involving the creation of standalone listed entities.
Sime Darby said there would be better focus on capital management and growth strategies. Currently, the respective entities within the Sime Darby Group are involved in different business segments and have different capital requirements and business strategies.
The exercise would also create shareholder value by way of unlocking the investment of the entitled shareholders in Sime Darby which in turn will allow them to participate directly in the equity and growth of the identified entities to be separately listed on the Main Market of Bursa Securities at the appropriate time.
It also said currently, the operating business and financial profile of each of the identified entities are fundamentally different from the trading & logistics entity and is likely to appeal to different group of investors.
Hence, the entitled shareholders will be able to manage their investments or rebalance their portfolio in each of the business entities independent of each other and also provide a wider choice for investors who may seek an investment in one of these business entities, but not the others.
This in turn may result in the development of a more focused shareholder base for the identified entities and the trading & logistics entity.
Sime Darby also pointed out the proposed Listing would not entail any fund raising by Sime Darby and the identified entities.
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