Menang to sell concession business to Widad Group for RM122 million

TheEdge Wed, Nov 27, 2019 08:20pm - 3 years View Original

KUALA LUMPUR (Nov 27): Widad Group Bhd, whose share price closed today at a two-year high of 50.5 sen, wants to take over Menang Corp (M) Bhd’s concession on management and maintenance of UiTM Seremban 3 campus in Negeri Sembilan for RM122 million.

The concession business is housed under Menang’s subsidiary Inovatif Mewah Sdn Bhd. However, it is not known if the settlement of the sale consideration is in cash terms or the purchaser’s shares.

The sale proceed is equivalent to 78% of Menang’s market capitalisation. It is equivalent to 25.3 sen cash per share, should it be a cash deal.

Menang announced to the stock exchange that a Heads of Agreement (HoA) has been executed today between Widad Group and Innovatif Mewah’s shareholders who are Menang’s two wholly-owned subsidiaries — Menang Development Sdn Bhd (MDSB) and Menang Industries (M) Sdn Bhd (MISB) plus minority shareholder, Tentu Selesa Sdn Bhd.

Under the agreement, MDSB and MISB will dispose of its 71% equity interest in Innovatif Mewah, while Tentu Selesa will let go of its 29% equity interest subject to terms and conditions of a share sale and purchase agreement which will be entered into later.

The announcement confirms The Edge Malaysia Weekly’s report which quoted sources saying that Menang Corp is in talks with parties to sell its concession businesses.

Menang, via Inovatif Mewah Sdn Bhd, built the facilities and infrastructure and carries out maintenance work on the UiTM Seremban 3 campus in Negeri Sembilan under the concession agreement signed in May 2010. Innovatif Mewah currently has a remaining concession period of 14 years until 2034.

Menang said today its board believes the proposed disposal is timely and “provides the group with an opportunity to monetise its concession asset at a reasonable price”.

It said the proposed disposal, which is expected to be completed within seven months, will also help strengthen the company’s financial position by lowering its gearing and provide working capital.

Shares in Menang settled 1.5 sen up at 32.5 sen at today's close for a market capitalisation of RM156.26 million.

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Lim Choon lin
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why menang need to sell good erning concesion cam.p in very low price

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