KUALA LUMPUR: DRB-HICOM Bhd is selling its entire stake in Alam Flora Sdn Bhd to Malakoff Corp Bhd for RM944.6 million.
Both DRB-HICOM and Malakoff are linked to Tan Sri Syed Mokhtar Al-Bukhary.
In a Bursa Malaysia filing today, DRB-HICOM said its wholly-owned Hicom Holdings Bhd was disposing its entire 97.37 per cent shareholding in Alam Flora to Malakoff wholly-owned Tunas Pancar Sdn Bhd.
Alam Flora has a 22 year concession till September 1, 2033 to collect solid waste and garbage in Pahang, Kuala Lumpur and Putrajaya.
It reported a pre-tax profit of RM99.66 million for the financial year ended March 31, 2018.
DRB-HICOM said proceeds from the disposal would be used to repay debts totalling RM500 million and the rest as working capital for Proton Holdings Bhd.
The group will net RM735.4 million gain from the disposal.
“The proposed disposal will also allow DRB-HICOM to partly use the proceeds towards its 50.1 per cent-subsidiary Proton Holdings Bhd, which is currently undergoing a turnaround programme, if required.
“This turnaround programme is underpinned by a 10-year business plan which involves quality improvements, cost optimisation and new model launches,” it said.
DRB-HICOM said if required by the national carmaker, the proceeds would be mainly used to part-finance the development cost for new models expected to be incurred within the next 12 months.