Malayan Cement Berhad's Minority Shareholders Endorse Strategic Asset Rationalisation & Optimisation Plan
Kuala Lumpur, Monday 30 August 2021
Malayan Cement Berhad received shareholders' approval at an extraordinary general meeting today to proceed with acquisition of YTL Cement Berhad's entire cement and ready-mixed concrete operations in Malaysia for a total consideration of RM5.158 billion.
Tan Sri (Sir) Francis Yeoh Sock Ping, Executive Chairman of YTL Cement and Malayan Cement, said, "We are extremely grateful for the steadfast support from our minority shareholders of Malayan Cement throughout this process, which has seen them endorse our long-term vision from the start.
"This includes the new shareholders who came onboard and ensured the success of the private placement exercise in June this year, a key building block of this strategic asset rationalisation plan to build value for Malayan Cement and its shareholders."
Dato' Sri Michael Yeoh Sock Siong, Managing Director of YTL Cement and Malayan Cement, said, "This transaction will bolster profitability and value enhancement, increasing the size of Malayan Cement's cement and ready-mixed concrete businesses, whilst enabling YTL Cement to consolidate similar operating businesses under a singular umbrella. Upon completion, the effectiveness and efficiency of our cement operations and ability to deliver seamless solutions to customers will be optimised, boding well for the positive growth and outlook of Malayan Cement and the industry going forward."
The total consideration of RM5.158 billion, which is subject to adjustments at point of completion, will be settled via RM2.0 billion in cash, RM1.408 billion through the issuance of 375.5 million new ordinary shares in Malayan Cement and RM1.75 billion through the issue of 466.7 million new irredeemable convertible preference shares (ICPS) in Malayan Cement.
The issue price for the new Malayan Cement shares and ICPS to be issued has been fixed at RM3.75 per share/ICPS. This is the price per share paid by YTL Cement for the acquisition of its 76.98% equity interest in Malayan Cement in 2019, which was premised on the potential synergies that would arise from the integration of businesses between the two groups.
The partial settlement of the consideration through the issuance of new shares and ICPS rather than wholly in cash is intended to enable Malayan Cement to optimise its cash reserves and gearing levels. The strategic realignment will foster value creation for shareholders of Malayan Cement and allow investors to invest directly on a focused basis in Malaysia's leading building materials company.