KUALA LUMPUR : Pelikan International Corporation Bhd (PICB) plans to sell its stationery business to Holdham SAS Pelikan Group GMBH for Euro136 million or RM695.4 million, and payout capital and special dividends with the proceeds.
PICB will sell its interests in Pelikan Group GMBH, Pelikan PBS-Produktionsgesellschaft MBH & Co. Kg and Pelikan PBS-Produktion Verwaltungs GMBH as well as assign debts of Euro 31.7 millionto Holdham.
The move will see the group's assets consist of more than 70 per cent cash and classifying it as a Practice Note 16 company, or cash company.
PICB said it plans to distribute the remaining proceeds to its shareholders on a pro-rata basis as soon as practicable if the group: fails to submit a proposal to acquire a new core business to the Securities Commission for its approval within 12 months from Bursa Malaysia Securities notifying that the company is considered as a cash company; or does not intend to maintain its listing after it receives notice of becoming a cash company.
PICB acquired the stationery business in 2005 and has since held and manage the business for over 18 years.
In a filing with Bursa Malaysia the group said limited resources has made it challenging for the group to contend with distribution changes, production technology and also the impact on technology against usage on stationery.
Although the group has in recent years generated profits since 2015, the group is unable to declare any dividend out of operating profits because of the continuous high working capital requirement and new product development and reinvestments.
Based on the financial year end 2022, the group had a working capital of RM335.97 million and borrowings of RM155.16 million.
"Accordingly, the board believes that the Proposed Disposal provides an opportunity for the PICB group to unlock and realise the value of its investment in the Disposed Companies at an attractive valuation," PICB said.
The group said the proposed capital repayment and special dividend could be in the a distributon of 75 sen a share and a special dividend of 10 sen a share, which would come up to a total payout of RM521 million.
PICB's share price was trading up 0.58 per cent at 86 sen as at 10.12 am.