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Denko executive chairman injects plastic moulding business into firm in RM1bil deal

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PETALING JAYA: Denko Industrial Corp Bhd says its executive chairman, Datuk Seri Foo Chee Juan, is injecting his privately controlled plastic moulding business into the company for new shares in a deal worth RM1.186bil.

Foo owns 54.56 million shares in Denko, which gives him 52.2% control of the company, following his earlier bid to take over the company in February this year.

In a filing with Bursa Malaysia yesterday, Denko said it had entered into a heads of agreement with Foo and Datuk Fong Chiu Wan to acquire Integrated Manufactur­ing Solutions Sdn Bhd (IMS) for RM1.186bil.

The purchase will be satisfied via the issuance of 1.032 billion new Denko shares at RM1.15 a share.

“IMS and Denko are in the plastic injection moulding business serving the same category of customers in the electrical and electronic industry. The proposed acquisitio­n is undertaken by Denko as part of its plastic injection moulding business expansion strategy to grow its revenue and customer base, and to expand its production capacity, which, in turn, will improve its financial performanc­e,” it said.

The company said Foo would abstain from all deliberati­on regarding the acquisitio­n.

For the year ended March 31, the IMS group recorded an approximat­e revenue of RM1.8bil and a profit after tax of RM79.1mil. The IMS group has been in operations for more than 20 years and has formed relationsh­ips with its customer base of several multinatio­nal companies. “The proposed acquisitio­n enables Denko and its subsidiari­es to consolidat­e the financial results of the IMS group and gain access to the customers of the group,” it said.

Meanwhile, Denko is also proposing to issue up to 10.45 million new shares via a private placement. The placement exercise will raise approximat­ely RM12mil for the company.

“The proposed acquisitio­n and private placement are not conditiona­l upon each other, nor upon any other proposals undertaken or to be undertaken by the company,” it said.

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