Kuala Lumpur, April 20 – Hua Yang Berhad yesterday announced that the Group, via its wholly-owned subsidiary company, Prisma Pelangi Sdn Bhd, had acquired an additional 20.12% investment stake in property group, Magna Prima Berhad (Magna Prima).
In addition to the 10.84% investment stake the Group had acquired on 25 January 2017, this latest acquisition will result in Hua Yang holding a 30.96% stake in Magna Prima, resulting in Magna Prima becoming an associate company of the Group.
In a filing to Bursa Malaysia, Hua Yang disclosed that the recent acquisition involved the purchase of 66,889,940 ordinary shares of the issued and paid-up share capital of Magna Prima for a total consideration of RM123.7 million (RM1.85 per purchase share).
Ho Wen Yan, Chief Executive Officer of Hua Yang, said, “Subsequent to our initial acquisition, we foresee that there are significant opportunities and synergies between the two companies that we can further tap on to drive growth for our Groups. Our decision to increase our stake is a reflection of this confidence.”
“This move also reaffirms our commitment to strengthen the Group’s presence in the Klang Valley. Although we already hold strategic landbanks in this region, this collaboration allows us to invest in existing landbanks that hold strong potential for growth, such as those in Jalan Ampang, Kuala Lumpur; Jalan Gasing, Petaling Jaya as well as Seksyen 15, Shah Alam, amongst others. In the long-term, this will positively impact the Group’s earning.”
“This collaboration also provides business opportunities, management synergies, cost efficiencies and potential for expansion for both organisations. Hua Yang will also be able to expand its market presence and recognise a proportionate share of Magna Prima’s future profits,” Ho explained.
The acquisition price of RM123.7 million will be funded through internally generated funds and borrowings. As the exercise does not involve the issuance of Hua Yang new shares, the acquisition will not have any effect on the issued and paid-up share capital and substantial shareholders’ shareholdings of the company. In addition, the acquisition is not expected to have a material effect on net assets per share and gearing of the Group.