ARB dis­poses re­main­ing stake in Sabah tim­ber busi­ness

The Borneo Post - - Business -

KUCH­ING: ARB Bhd (ARB), pri­mar­ily an IT soft­ware and plat­form provider, has en­tered into a con­di­tional share sale agree­ment with AY Brothers Sdn Bhd (AY Brothers) for the pro­posed dis­posal of its re­main­ing 51 per cent in­ter­est in Atur­maju (Sabah) Hold­ing Sdn Bhd (AHSB) for a con­sid­er­a­tion of RM5.6 mil­lion.

The dis­posal of the en­tire in­ter­est in AHSB is in line with ARB’s strate­gic plan to trans­form ARB’s busi­ness po­si­tion from the tim­ber sec­tor to the in­for­ma­tion tech­nol­ogy (IT) sec­tor.

Pri­mar­ily in­volved in the man­u­fac­tur­ing of wood prod­ucts then, AHSB’s op­er­a­tions have been in­cur­ring losses over the past few years, which re­sulted in the ces­sa­tion of its op­er­a­tions since the se­cond quar­ter of 2018.

ARB had ear­lier dis­posed of a 49 per cent stake in AHSB in Au­gust 2019, also to Ay Brothers. The lat­ter has since de­cided to take full con­trol of AHSB’s busi­ness per­a­tions.

There­fore, the pro­posed dis­posal of the re­main­ing 51 per cent stake in AHSB serves as a timely op­por­tu­nity for ARB to fully di­vest its loss-mak­ing and non-op­er­at­ing tim­ber busi­ness.

Com­ment­ing on the dis­posal, Datuk Sri Liew Kok Leong, the Ex­ec­u­tive Di­rec­tor of ARB said, “The (pro­posed) dis­posal is a tes­ta­ment of ARB’s strate­gies to trans­form and ex­pand on the IT sec­tor in­stead.

“The divest­ment will en­able us to chan­nel our strength and ca­pa­bil­i­ties on ac­tiv­i­ties that are aligned with our IT busi­ness, namely the En­ter­prise Re­source Plan­ning (ERP) and the In­ter­net of Things (IoT), which con­sti­tutes the main driver of our earn­ings con­tri­bu­tion.

“We recog­nise the im­por­tance of IT in the chal­leng­ing so­ci­ety land­scape as dig­i­tal tech­nol­ogy is con­stantly chang­ing the needs and ex­pec­ta­tions of con­sumers. Hence, we be­lieve we are on the right track as far as the de­vel­op­ments (of the ERP and IoT seg­ments) are con­cerned.

“This was well demon­strated in our fi­nan­cial per­for­mance in 2019, where earn­ings have in­creased by al­most eight-fold since the ces­sa­tion of the tim­ber busi­ness in 2018.

“We be­lieve that the IT busi­ness re­align­ment will fur­ther ac­cel­er­ate an in­te­grated tech­nol­ogy roadmap and po­si­tion ARB to re­spond more quickly to new mar­ket op­por­tu­ni­ties, im­prov­ing mar­ket lead­er­ship po­si­tions and sup­port our longterm growth strat­egy.”

He fur­ther added, “If an op­por­tu­nity arises, we will un­doubt­edly eval­u­ate po­ten­tial busi­ness part­ner­ships and/ or vi­able joint ven­tures with strate­gic part­ners, in Malaysia and Sin­ga­pore.

“We are also putting con­scious ef­forts to ven­ture into new mar­kets, es­pe­cially the In­dochina re­gion as we see op­por­tu­ni­ties to col­lab­o­rate with the do­mes­tic part­ners there to pur­sue new busi­ness op­por­tu­ni­ties in the IT mar­ket. We will di­rect our core com­pe­ten­cies to nur­ture and build our com­pe­ten­cies in this area.

“We are op­ti­mistic of achiev­ing a bet­ter busi­ness and fi­nan­cial per­for­mance, as well as en­hanc­ing share­hold­ers’ value in the longterm. Last but not least, the pro­ceeds from the dis­posal and the elim­i­na­tion of ex­penses as­so­ci­ated with main­tain­ing the loss-mak­ing tim­ber busi­ness are ex­pected to strengthen our cash­flow po­si­tion.

“Hence, the group is well­po­si­tioned to un­der­take vi­able in­vest­ment op­por­tu­ni­ties, new part­ner­ships and/or col­lab­o­ra­tions to fur­ther ex­pand its IT seg­ment, go­ing for­ward.”

Ear­lier this month, ARB, via its in­di­rect wholly owned sub­sidiary, Data­book Pte Ltd en­tered into a busi­ness part­ner­ship agree­ment and an out­sourc­ing part­ner­ship agree­ment with As­ter­isk Com­puter (Far East) Pte Ltd to sup­port the ac­cel­er­ated de­ploy­ment of the en­ter­prise ap­pli­ca­tion soft­ware so­lu­tions in Malaysia and Sin­ga­pore.

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