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Can-One’s creamer manufacturing unit sold at maximum final price of RM1b

Can-One’s creamer manufacturing unit sold at maximum final price of RM1b

18 Aug 2020

Can-One Bhd has managed to fetch RM1 billion cash — the maximum price payable — from the sale of its sweetened creamer and evaporated creamer manufacturing business to Asia Dairy Creations Sdn Bhd.

The price tag is derived from the audited financial figures of F&B Nutrition Sdn Bhd, the company which housed the creamer business, for the financial year ended Dec 31, 2019 and in accordance with the terms of the sale and purchase agreement (SPA), said Can-One in a filing with Bursa Malaysia.

The sale proceeds are nearly double of Can-One’s market capitalisation of RM519 million. Can-One had earlier said it plans to utilise the gross proceeds from the sale to pare down its bank borrowings.

Can-One, which undertook an exercise to take Kian Joo Can Factory Bhd private last year, had earlier said the disposal was expected to result in a net gain of RM610.8 million based on the floor price of RM800 million, and RM810.8 million based on the maximum price of RM1 billion.

Theoretically, Can-One’s NTA per share could increase by between RM3.17 and RM4.21, it added in an earlier announcement.

As at March 31, Can-One’s NTA per share stood at RM8.94. Its share price closed at RM2.70. The company’s total borrowings stood at RM1.462 billion.

In the filing with the exchange, Can-One said the company and Wholesome Dairies Pte Ltd (WDPL) via a letter agreed to the final disposal consideration of RM1 billion. WDPL is the holding company of Asia Dairy Creations.

To recap, Can-One and WDPL entered into the SPA on June 14, 2019.

The SPA involves the proposed disposal by Can-One of the entire issued share capital of F&B Nutrition, through the sale of Can Ridge Sdn Bhd to WDPL for an aggregate disposal consideration of RM800 million to RM1 billion.

Can Ridge is a wholly-owned subsidiary of Can-One, while Asia Dairy Creations is the nominated transferee under the corporate exercise, according to Can-One’s filing then.

Source: The Edge Markets

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