KUALA LUMPUR: Hap Seng Consolidated Bhd
is selling its 100% stake in logistics service provider Hap Seng Logistics Sdn Bhd (HSL) to a unit of Hong Kong-based Lei Shing Hong Ltd for RM750mil.
The diversified group, whose businesses range from plantations to automotive, told Bursa Malaysia on Tuesday that the proposed disposal was an opportunity for it to realise a substantial gain from its investment in HSL.
“The proposed disposal, which translates into 2.98 times of the (implied) price-to-book ratio (PBR) (based on the unaudited financial statements of HSL as at Dec 31, 2016), is an attractive valuation and gain for Hap Seng,” the company said.
The sale consideration also translates into an implied price-earnings ratio (PER) of 459.47 times based on the FY16 unaudited financial statements.
It said these were above the range of PBR and PER of logistics firms such as Xin Hwa Holdings Bhd and Tiong Nam Logistics Holdings Bhd.
It added that the sale consideration received would be used to repay borrowings and for working capital of the group.
This proposed sale is deemed as a related party transaction as Tan Sri Lau Cho Kun is a 37.68% major shareholder of Lei Shing Hong Ltd and a 56% major shareholder and director of Gek Poh (Holdings) Sdn Bhd, which has a total shareholding of 61.43% in Hap Seng.
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