UEM Edgenta to trim borrowings with proceeds

PETALING JAYA: UEM Edgenta Bhd plans to use the bulk of proceeds from the sale of its 61.2 per cent stake in New Zealand-based Opus International Consultants Ltd (OIC) to reduce borrowings.

UEM Edgenta’s shareholders yesterday approved the stake disposal to WSP Global Inc for RM528.6 million, or NZ$1.92 (RM5.84) per OIC share.

The disposal is expected to be completed by year-end.

The company has estimated a disposal gain of RM292.3 million on a consolidated basis.

UEM Edgenta chief executive officer Datuk Azmir Merican said the disposal would enable the company to strengthen its balance sheet and embark on the next phase of growth.

About RM415.2 million from the total proceeds would be used to repay debt within six months, reducing UEM Edgenta’s gross gearing significantly to 0.38 times from 0.79 times.

The company’s total outstanding borrowings is at RM1.2 billion while its net gearing will be reduced to 0.25 times.

Azmir said UEM Edgenta would no longer be exposed to OIC’s overseas operations, particularly in Canada and Australia.

“The disposal also represents an opportunity for us to unlock the value of our equity interest in OIC,” he said after UEM Edgenta’s extraordinary general meeting, here, yesterday. Ayisy Yusof