KUALA LUMPUR: PRG Holdings Bhd
has diversified into the property business following an internal reorganisation that will see its ownership in Hong Kong-listed Furniweb Holdings Ltd bumped up to 67.97%.
The group announced in a filing with Bursa Malaysia on Thursday it had transferred its 50 units of Picasso Residence condominium's entitlement to its 50.45%-owned Hong Kong subsidiary for RM61.98mil via a combination of cash and Furniweb shares.
Accordingly, the amount will be settled via payment of a 10% cash portion of RM6.19mil and the issuance of 329.07 million new Furniweb shares at an issue price of 30 Hong Kong cents a share for the balance RM55.78mil.
Furniweb is an investment holding company, which has subsidiaries principally engaged in the manufacturing and sale of elastic textile, webbing, rubber tape and polyvinyl chloride-related products and energy efficiency business.
In a statement, PRG said the transfer of the condominium units to Furniweb is part of its corporate strategy to increase its stake in Furniweb.
"With the condominium units the group will also diversify its business to include property investment and we believe this will bring in new income streams to Furniweb and the PRG Group as a whole.
"With the manufacturing and energy efficiency business in Furniweb and the addition of property investment business, we believe this will form a strong base and bring positive earnings to shareholders," it said.
PRG added that the proposed exercise will improve its financial liquidity immediately upon receiving the cash to be utilised as working capital.
In addition, it said the increase in equity interest in Furniweb would allow PRG to further consolidate its interest in Furniweb and enable it to facilitate easier decision-making and steer the direction of Furniweb’s operations.
"Given the financial performance of Furniweb, the board believes that the proposed exercise would further improve the financial performance of PRG Group,” said PRG.
Presently, PRG is primarily engaged in the property development, construction, manufacturing, and agriculture businesses.
The company also expanded into the energy efficiency business by acquiring Singapore-based Energy Solution Global Ltd, a new energy savings company, in 2021 through Furniweb.
