Cahya Mata Sarawak Bhd (CMS) has increased its stakes in its associate company OM Materials (Sarawak) Sdn Bhd (OM Sarawak) by acquiring additional five per cent equity interest in the company.
CMS in a press statement yesterday said its wholly-owned subsidiary, Samalaju Industries Sdn Bhd (SISB), has entered into a share sale agreement with OM Materials (S) Pte Ltd (OMS), a wholly-owned subsidiary of OM Holdings Ltd (OMH) for the purchase of an additional five per cent equity interest in the ferrosilicon and manganese alloys smelting project in Samalaju Industrial Park.
To note, CMS owns 20 per cent of OM Sarawak.
CMS revealed that under the terms of the share sale agreement with OMS, the price payable by SISB to OMS for the transfer of the equity interest is US$18.45 million.
It believes that the share transfer is expected to be completed by the end of this month.
Upon successful completion of the share transfer, SISB’s effective interest in the Sarawak project will be 25 per cent and OMS’ effective interest will be 75 per cent.
In response to the share sale agreement, CMS’s group managing director Datuk Richard Curtis said: “The purchase of additional equity interest reflects our special focus in businesses that are part of the Sarawak Corridor of Renewable Energy (SCORE) initiative, and our confidence in this smelting project.
“OMS’s first phase of production commenced in September 2014, and going forward this project is expected to contribute significantly towards our group’s earnings,” he said.
The purchase of more equity interest in OM Sarawak came four weeks after the company posted record profits, with a year-on-year pre-tax profit up 16 per cent to RM341 million for the financial year ended Dec 31, 2014 (FY14).
The company observed that it generated a total revenue of RM1.67 billion for FY14, an increase of 18 per cent y-o-y from the previous year’s revenue of RM1.42 billion.