KUALA LUMPUR: Pelikan International Corp Bhd
(PICB) and its subsidiaries have agreed to dispose of Pelikan Group GMBH (PGG) to Holdham SAS for €136mil (about RM695.44mil), which will see the group exit from its core stationery business.
Following the disposal, the company plans for the bulk of the proceeds to be returned to shareholders via a proposed distribution.
In a filing with Bursa Malaysia, PICB said its subsidiaries Pelikan Holdings AG (PHAG) and Molkari Vermietungsgesellschaft mbH & Co. Objekt Falkensee KG will be selling their 51.36% and 20.64% respective stakes in PGG, while PICB will sell its 28% interest, to Holdham, a France-based manufacturer and distributor of school and office supplies.
Two other business units under PHAG - Pelikan PBS-Produktiongesellschaft MBH (PPG) and Pelikan PBS-Produktion Verwaltungs-GMBH (PBS) - will also be transferred to Holdham for a nominal fee of €1 each.
PICB said the debts owing by the group and PHAG to PGG and PPG amounting to €31.78mil would be assigned to Holdham as part of the deal.
The board of directors has proposed a special dividend and capital repayment to shareholders post completion of the sale.
For illustration purposes, the dividend has been tentatively set at 10 sen per share amounting to RM60.32mil, and the capital repayment pegged at RM452.4mil by way of cash distribution of 75 sen a share on a yet-to-be determined entitlement date.
Under this scenario, the company would be left with an issued share capital of RM187.87mil after the payouts.
Of the remainder of the proceeds, RM139.71mil will go towards working capital and the settlement of liabilities while RM40mil will be used to repay bank barrowings and RM3mil to cover expenses related to the proposals.
The board of directors expects the proposals to be completed by the fourth quarter of 2023.
According to the filing, PICB aims to unlock and realise the value of its investment in the disposed companies in light of the challenges it faces in the form of changes to distribution channels, production technology and headwinds in the global economy.
"Although the group has in recent years generated profits since 2015, the group is unable to declare any dividend out of operating profits because of the continuous high working capital requirement and new product development and reinvestments," it said.
In its 2022 financial year, the group had a working capital of RM335.97mil and borrowings of RM155.16mil.
Upon completion of the proposed disposal, PICB could be classified as an “affected listed issuer” pursuant to Paragraph 8.03A of the listing requirements and/or “cash company” pursuant to Paragraph 8.03 and Practice Note 16 (PN16) of the Listing Requirements.
"If so, the continuous listing of PICB on the Main Market of Bursa Securities is dependent on the ability of the Board and management to formulate a regularisation plan within the stipulated period," said PICB.
Failure to comply with the obligations under the Paragraph 8.03A and/or Paragraphs 8.03 and PN16 of the listing requirements may result in PICB's listed securities being suspended and/or the Company being de-listed from the Official List of Bursa Securities.
As at 11.15am, the trading stock of PICB was down two sen or 2.34% to 83.5 sen a share on the back of 10.3 million units traded.
