China Automobile’s purchase of Local Assembly terminated

PETALING JAYA: China Automobile Parts Holdings Ltd’s (CAP) plan to acquire Local Assembly Sdn Bhd has been terminated.

This comes as Local Assembly said it had not received a valid and executed term sheet and it deems that CAP no longer intends to continue with the acquisition, according to CAP’s filing with the stock exchange.

“In such event, all negotiation, and the MoU (memorandum of understanding) dated July 5, 2019, between the parties shall automatically be deemed terminated.”

CAP also explained that the delay of seven market days to announce the termination was due to its efforts to liaise with Local Assembly to reverse the termination.

“However, as at the date of this announcement, the company has exhausted all means to do so and is unable to reverse the said termination.”

Local Assembly is principally engaged as a sub-contractor assembler of electrical appliances and equipment, and manufacturer of plastic injection moulded components.

Worth noting is that the proposed acquisition of Local Assembly was intended to form part of CAP’s proposed regularisation plan. The group reiterated its commitment in formulating a regularisation plan pursuant to PN17 of the Main Market Listing Requirements.

“The board also wishes to inform that it is currently deliberating on its next course of action and will make the necessary announcements in due course.“

CAP has been a PN17 company since January 2018 after its external auditor Messrs PFK expressed an audit disclaimer of opinion on its financial statements.