Chemical Company of Malaysia proposes to distribute CCM Duopharma shares
PETALING JAYA: Chemical Company of Malaysia Bhd (CCM) yesterday announced a slew of corporate exercises, including a proposed distribution of its entire 73.37% stake in CCM Duopharma Biotech Bhd to its shareholders by way of the reduction of share capital by RM462.9 million.
CCM Duopharma will cease to be a subsidiary of CCM upon completion of the proposed distribution and capital reduction. Since its acquisition back in 2005, CCM has held CCM Duopharma with an average cost of investment of RM2.31 per share.
CCM Duopharma manufactures, distributes, imports and exports pharmaceutical products and medicines.
CCM said it had monetised and consolidated all its pharmaceutical assets under CCM Duopharma back in 2015, as part of its strategy to review the group’s portfolio and strengthen its balance sheet.
“The proposed distribution and capital reduction is a natural step in furthering the growth of each division, by ensuring that each division receives the focus and investment needed to support its growth.”
With direct ownership in chemical and polymer coating as well as pharmaceutical companies, CCM said, entitled shareholders can manage their investment exposure or rebalance their portfolio in each of these businesses according to their individual investment objectives.
Permodalan Nasional Bhd’s shareholding in CCM will be reduced from 70.25% to 64.29%, but it will hold a direct stake of 47.17% in CCM Duopharma.
After the distribution and capital reduction, CCM will consolidate every three existing shares into one ordinary share in CCM.
Meanwhile, CCM proposes to sell three parcels of land in Shah Alan measuring 70.93 acres to GBA Corp Sdn Bhd for RM190 million.
The group also intends to undertake a private placement to issue up to 45.46 million shares to raise RM67.6 million based on an issue price of RM1.49 per share. Proceeds from the disposal and the private placement will be used to repay bank loans.
Trading in CCM and CCM Duopharma shares was suspended yesterday.