Snippets
D&O Green Tech raises stake in Korean unit
Ho Chung Teng 31 Aug 2017 16:23

 

D&O Green Technologies Bhd’s subsidiary is acquiring the remaining 32% stake in Dominant Opto Technologies Korea Inc (Dominant Korea), which is involved in the merchandising of semiconductor components.

 

D&O Green Tech’s 61.8%-owned subsidiary, Dominant Opto Technologies Sdn Bhd (Dominant Malaysia), is acquiring the rest of the stake it does not already own for US$1.7 mil (RM7.27 mil).

 

In a Bursa announcement, D&O Green Tech says the rationale for the acquisition is to allow Dominant Malaysia to assume full control over Dominant Korea in the decision-making process.

 

D&O Green Tech adds that the proposed acquisition is expected to contribute positively to the profit attributable to the company’s shareholder through the increase of earnings of Dominant Korea.

 

“The total consideration for the proposed acquisition will be satisfied by cash of US$1.7 mil, which will be funded by internally generated funds,” D&O Green Tech adds.

 

However, it says the proposed acquisition will have a slight negative effect on the net assets of the company, after including the effect of change in stake.

 

This is due to the difference between the purchase consideration and the additional share of net assets of Dominant Korea, charged to retained earnings in compliance with MFRS (Malaysia Financial Reporting Standards) 10.

 

D&O Green Tech says it will not assume any liabilities, including contingent liabilities and guarantees, pursuant to the acquisition of Dominant Korea. “The proposed acquisition will not have any effect on the gearing of D&O Green Tech,” the company adds.