Malton inks MoU to potentially invest in Ho Wah Genting’s electric vehicle business - MIDA | Malaysian Investment Development Authority
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Malton inks MoU to potentially invest in Ho Wah Genting’s electric vehicle business

Malton inks MoU to potentially invest in Ho Wah Genting’s electric vehicle business

26 Mar 2021

Malton Bhd has signed a memorandum of understanding (MoU) with Ho Wah Genting Bhd’s (HWGB) to potentially acquire a 14% stake in its wholly-owned electric vehicle (EV) unit HWGB EV Sdn Bhd, the property developer said in a bourse filing.

“The MoU enables Malton to have access to further information in relation to the EV project, and conduct its own internal assessment and feasibility study on the viability of investing in HWGB EV. The HWGB EV Investment represents an opportunity for Malton and its subsidiaries to invest in HWGB EV’s future business of manufacturing, assembling and distributing electric vehicles in Malaysia,” Malton said, adding that the MoU will last for 12 months.

Malton clarified that its investment in HWGB EV is subject to it obtaining further information on the introduction of EVs in Malaysia, and will be decided upon further evaluation of the EV project and discussions with HWGB.

The investment is also subject to the agreements HWGB EV has signed with Seiyong Motor and Xiamen Chief.

HWGB EV has signed MoUs with Chinese auto companies Seiyong Motor Co Ltd, Xiamen Chief Electric Vehicles Co Ltd and Beijing Aitou Capital Management Ltd to establish a basis of cooperation and collaboration to introduce, assemble and distribute EVs in Malaysia.

In a separate bourse filing, HWGB said while Malton does not not have any experience in the EV industry, it is believed that the latter’s local partner expertise and experience in the property industry will contribute and strengthen the implementation of the EV project.

“The financial commitment required by the group to venture into the electric vehicle [sector] cannot be ascertained at the moment until a definitive agreement is entered and relevant authorities’ approvals are obtained.  However, should the business materialise, it is expected to contribute positively to future earnings of the company,” HWGB added.

At the time of writing today, Malton shares were trading 3.92% or two sen higher at 53 sen, valuing it at RM279.91 million. Meanwhile, HWGB shares were down 0.98% or half a sen at 50.5 sen, yielding a market capitalisation of RM302.34 million.

Source: The Edge Markets