Pecca proposes to acquire Indonesian car leather upholstery maker
31 Oct 2022
Pecca Group Bhd plans to acquire a 80% stake in an Indonesian car leather upholstery maker firm, in its bid to enlarge its foreign presence in the automotive industry by entering into the Indonesian market.
The group said its wholly-owned subsidiary Pecca Leather Sdn Bhd (PLSB) on Monday (Oct 31) signed a memorandum of understanding with five parties — PT Multi Berjaya Asindo, CSC Automotive Sdn Bhd, Tan Kim Cheang, Neo Hwee Leong and Herny Pramana — for the acqusition of the stake in PT Gemilang Maju Kencana (GMK).
In a filing with Bursa Malaysia, Pecca said PT Multi Berjaya Asindo is involved in the trading of packing, carton box and injection tooling, while CSC is engaged with the production of car interior accessories and trading car accessories.
Neo is the general manager of GMK, while Herny is head of the finance department of the company.
PT Multi Berjaya Asindo is currently the largest shareholder of GMK with a 61% stake, followed by CSC Automotive (22%) and Tan (16%).
Post-acquisition, PLSB will emerge as the largest shareholder of GMK, with an 80% stake. The stake will cost PLSB 6.4 billion rupiah (RM1.94 million).
Neo will also emerge as a substantial shareholder with a 10% shareholding in GMK, with the remaining 10% owned by Herny, who currently owns a 1% stake in GMK. The 10% shareholdings in GMK will cost them 800 million rupiah each.
Pecca said PLSB, Neo and Herny would also inject funds totalling three billion rupiah into GMK for additional working capital, in accordance with the proportion of their shareholding.
GMK is a company associated with Indonesia’s MPI group of companies.
After the proposed acquisition, Pecca said PLSB will seek to secure business and marketing support from MPI’s founder, Lim See Poh, and will also capitalise on the competency and experience of Neo and Herny.
“The well-established market presence of GMK will help Pecca accelerate its presence in this competitive industry,” Pecca added.
Pecca’s share price settled 2.5 sen or 2.91% higher at 88.5 sen on Monday, giving the group a market capitalisation of RM666 million.
Source: The Edge Markets