KUALA LUMPUR: Berjaya Corporation Bhd
's (BCorp) subsidiary Berjaya Group Bhd (BGroup) has inked an agreement with Naza Corporation Holdings Sdn Bhd to dispose of 100 per cent equity interest in Berjaya Enviro Holdings Sdn Bhd (BEnviro) for RM700 million.
BCorp’s joint chief executive officer Vivienne Cheng Chi Fan said the proposed disposal would provide an opportunity for the BCorp group to monetise its investment in BEnviro with an estimated gain of about RM490.74 million.
Additionally, she said the proposed disposal is expected to improve the earnings, net assets and the gearing of the group significantly.
"The selling of BEnviro will generate substantial financial returns from BCorp's investments in BEnviro where the gains will enhance the net assets and the utilisation of the proceeds is expected to contribute positively to the group's future earnings.
"The value of RM700 million was 18.4 times the price-to-earnings ratio agreed upon based on the next three years profit guarantee of RM38 million per annum," she said at the signing ceremony between BGroup and Naza for the ownership transfer of BEnviro here today.
BEnviro is involved in the environmental business segments of solid waste management with engineered sanitary landfill, landfill gas management via renewable energy generation from landfill gas, and scheduled waste management through recycling, treatment and disposal.
BEnviro's waste management projects include the Bukit Tagar Sanitary Landfill in Selangor.
Upon the completion of the proposed disposal, both BGroup and BEnviro will set up a joint venture company (JV Co) - with BGroup and BEnviro owning 49 and 51 per cent respectively - to collaborate in all new projects including but not limited to sanitary landfills, environmental and waste management in Malaysia and overseas.
"Upon completion of the proposed disposal, we will continue to explore new projects with BEnviro via the JV Co and be committed to remaining and providing environmental engineering work services.
"The decision to divest BEnviro was made after careful consideration and analysis of the current market conditions and strategic goals of the BCorp," Vivienne said.
Naza’s group executive chairman SM Nasarudin SM Nasimuddin said via this proposed acquisition, Naza would leverage the extensive operational infrastructure, technological advancements, and talented workforce of BEnviro and its seven subsidiaries, targeting to retain the management and talent of these entities for business continuity.
"This acquisition reinforces Naza's dedication towards strategic growth of its business reach (by) venturing into the provision of comprehensive waste management solutions and promoting environmental sustainability.
"The group has been exploring new sectors that align with its vision of sustainable development, resource efficiency, and upholding the highest standards of environmental stewardship," he said in a separate statement.
He said that waste management, a crucial aspect of the green economy with sizeable growth potential, perfectly aligns with the company's vision.
"Waste management businesses have predictable, steady income streams and the industry is non-cyclical in nature, both of which are key considerations for this acquisition," he said. - Bernama
