KUALA LUMPUR (Nov 16): Pacific & Orient Bhd (P&O) has disposed of a 12.86% stake, comprising 31.78 million shares, in Ancom Bhd for RM78.7 million via a mix of open market and direct business transactions.

In a filing on Tuesday (Nov 16), the general insurer said it sold 8.51 million Ancom shares for RM21.06 million during the day.

A day earlier, P&O announced the disposal of 23.27 million Ancom shares for RM57.63 million between Oct 27 and Nov 10.

The group said all the disposed shares in the chemicals company were acquired between 1997 and 2012 at a total cost of RM22.42 million.

"The Ancom shares were initially acquired by P&O in 1977 as part of the group's long-term investments. P&O has decided to dispose of part of the Ancom shares to capitalise on the appreciating share price of Ancom shares," the group said in its filing on Tuesday.

It added that the proceeds from the disposal will be utilised for its working capital.

P&O still owns 14.94 million shares or a 6.04% stake in Ancom, worth RM41.97 million based on Tuesday's closing price of RM2.81 per share.

"The disposal will not have any material effect on the earnings per share, net asset per share, share capital and the substantial shareholders' direct and/or indirect shareholdings of P&O for the financial year ending Sept 30, 2022 (FY22). The disposal will not have any material gain or loss to the company as the value of the shares has been marked to market," the group said.

Despite not having any material effect, the total expected gain from the disposal for FY22 is expected to be around RM9.74 million, according to the filing.

In February, The Edge reported that P&O's managing director and chief executive officer Chan Thye Seng was open to opportunities to cash out from its investment in Ancom when the timing was right.

Ancom is an integrated agricultural and industrial chemicals company with a recently acquired 50.3% controlling stake in Main Market-listed industrial chemical products manufacturer Nylex (Malaysia) Bhd. It also owns 40% of ACE Market-listed liquid chemical transporter and chemical tank farm operator Ancom Logistics Bhd.

For its third quarter ended June 30, 2021, P&O saw its net loss widen to RM6.69 million from RM480,000 a year earlier, while revenue shrank to RM63.93 million from RM74.04 million.

For the nine-month period, however, the group managed to post a net profit of RM2.45 million, compared with a net loss of RM6.53 million for the previous year's corresponding period, despite a lower revenue of RM208.54 million compared with RM236.94 million previously.

As for Ancom, the chemical group saw its net profit almost triple to RM9.04 million for its first financial quarter ended Aug 31, 2021, from RM3.06 million a year prior, while revenue improved to RM404.73 million from RM346.12 million.

Its FY21 full-year results were equally impressive with a net profit of RM27.62 million against a net loss of RM21.74 million as revenue grew to RM1.54 billion from RM1.47 billion.

P&O shares rose two sen or 2.19% to 93.5 sen on Tuesday, for a market capitalisation of RM268.42 million.

Ancom was down five sen or 1.75% to RM2.81 (a handsome premium of 181% over RM1 at the beginning of the year), valuing the company at RM722.25 million.