ANCOM (4758) ANCOM BHD obtains shareholders approval to acquire all assets, liabilities of Nylex for RM179.3mil
Ancom Bhd shareholders approved the company's acquisition of the entire assets and liabilities of Nylex (Malaysia) Bhd for RM179.3 million.
KUALA LUMPUR: Ancom Bhd shareholders approved the company's acquisition of the entire assets and liabilities of Nylex (Malaysia) Bhd for RM179.3 million.
As Ancom currently holds a 50.3 per cent stake in Nylex, the net amount payable by the company will be RM96.7 million following the set-off arrangement, which is for the 49.7 per cent stake it does not own.
Ancom will fund the acquisition with an RM50 million cash payment and the issuance of 31.1 million new Ancom shares valued at RM46.7 million at a fixed RM1.50 per share.
Ancom group chief executive officer Lee Cheun Wei said the path forward is exciting as the company emerged as one of the region's most integrated agricultural and industrial chemicals players.
"The consolidation will allow for greater efficiency as we now have complete control over the company's manufacturing, distribution, and logistic functions.
"Moreover, it gives us the flexibility and potential to source, produce, store, and deliver a wider range of products.
"Besides that, we also expect other synergistic benefits such as economies of scale, corporate costs savings, and forming a stronger combined balance sheet," he said in a statement today.
Nylex will retain RM15.0 million cash in the company and be classified as a cash company upon approval by the Securities Commission Malaysia.
The balance of RM81.7 million will be distributed to all shareholders of Nylex via a cash payout of RM35.0 million and shares valued at RM46.7 million.
Lee said with the anticipated recovery of the economy premised on the high vaccination rate and the relaxation of border restrictions, and the rising commodity prices, Ancom is hopeful that the industrial chemicals division will improve going forward.
On the other hand, the agricultural chemicals division is also expected to register stronger performance with better spending power by the plantation sector owing to higher prices of various crops across the world, he said.
On the same day, Ancom shareholders passed the resolution of the change of name from Ancom Bhd to Ancom Nylex Bhd.
"If all goes to plan, we believe the factors mentioned above would propel the soon to be 'Ancom Nylex Bhd' to achieve our target of being a RM1 billion market capitalisation company before long," Lee said.
Barring any unforeseen circumstances, the acquisition and the name change are expected to be completed by the first quarter of 2022.
https://www.nst.com.my/business/2021/10/739868/ancom-obtains-shareholders-approval-acquire-all-assets-liabilities-nylex
