KUALA LUMPUR (April 5): Muar Ban Lee Group Bhd (MBL), which is planning to reduce its dependency on its existing core businesses, today announced the cash buy of a 3.5% stake in Symphony Life Bhd, and the proposed acquisition of a further 10.6% stake in the property developer.

The group acquired the 3.5% stake, comprising 22 million shares, from Gajahrimau Capital Sdn Bhd for RM20.64 million, or 93.8 sen per share, via an off-market direct business transaction.

In a filing with Bursa Malaysia, MBL said it has signed an agreement to buy another 10.6% stake of Symphony from Gajahrimau, comprising 67 million shares, for RM62.81 million or 93.75 sen per share, to be paid in cash, from existing funds and bank borrowings.

The price of 93.75 sen per share represents a 10.95% premium to Symphony's closing price of 84.5 sen today.

As at April 2, MBL held a 4.4% stake in Symphony. This increased to 7.9% with the off-market purchase of the 3.5% stake today.

"This is part of MBL Group's strategy of diversifying into other activities and industries with potential growth prospects instead of depending solely on its existing core businesses," the group said.

MBL is involved in the manufacturing of oil seed expeller and and automated kernel crushing plants, construction of biogas plant, and renewable energy and palm oil mill effluent waste treatment.

The group said the returns from its investment in Symphony are expected to contribute positively to its earnings if the property developer is able to capitalise the potential upsides from its inventories and investment properties.

For the full year ended Dec 31, 2020, MBL saw its net profit drop 52.8% to RM9.77 million, from RM20.71 million a year earlier, as earnings were dragged by weaker performance in manufacturing and automotive segment. Revenue grew 27.2% to RM216.2 million from RM169.93 million.

MBL's shares closed 1.5 sen or 2.42% higher at 63.5 sen today, valuing the group at RM142.61 million.

Symphony slipped two sen or 2.31% to 84.5 sen, giving a market capitalisation of RM530.81 million.