IN a bourse filing on March 13, Tadmax Resources Bhd announced that it has entered into a share sale agreement (SSA) to dispose of a 35% stake in wholly-owned subsidiary Pulau Indah Power Plant Sdn Bhd (PIPP) to Worldwide Holdings Bhd for RM58.4 mil.
The consideration, which was arrived at on a willing-buyer willing-seller basis, will be satisfied entirely in cash, and will be made in several parts, with an initial sum of 10% (RM5.84 mil) to be paid to Tadmax’s solicitor as stakeholder upon execution of the SSA, another 50% or RM29.2 mil to be paid to Tadmax upon completion of the SSA, and the remainder 40% or RM23.3 mil to be paid to Tadmax within 8 months of the completion date of the SSA.
The SSA also carries the condition that, within 3 months from the date of the SSA, the Engineering, Procurement, Construction and Commissioning (EPCC) contract and finalisation of negotiations of the Power Purchase Agreement have to be signed.
The proceeds of this sale will see Tadmax paying off the unfinanced portion of the purchase price of Alam Damai Land, which comes to about RM9 mil, while another RM3 mil will be for working capital. A further RM3.5 mil will be spent as estimated expenses in relation to the disposal, and the remainder RM42.9 mil will be used for future investment to complement its existing businesses.
This sale is not expected to have any effect on the share capital and shareholdings of Tadmax, but should result in a post-tax gain of about RM25.7 mil to Tadmax, increasing the net earnings per share of the company by about 3.3 sen per share. Net assets are expected to increase by RM25.7 mil as well for the company’s 2020 financial year.
Tadmax’s shares closed on March 13 at a static 20 sen, with 875,800 shares changing hands. – March 13, 2020
