Meda Inc ... Apr 09

It is venturing into the abattoir and meat distribution business via the acquisition of a 51% stake in Hadhari Cattle Industry Sdn Bhd for RM18 million cash consideration.

It had entered into a share sale agreement with the vendor Abdul Rashid Tang Abdullah to acquire 2.55 million shares of Hadhari Cattle. Upon completion, Hadhari Cattle will become a subsidiary of Meda.

Hadhari Cattle is involved in abattoir operations, distribution of meat and meat products and plans to venture into the development of feedlot vendor programme. It is leasing and operating the abattoir in Kampung Paya Pahlawan, Jitra, Kedah.

Amidst the economic slowdown in the property sector, Meda is seeking to diversify its business in order to derive a stable source of income. In the opinion of the board, Hadhari’s business represents such an income source.

The vendor had given a pretax profit guarantee of RM14 million, of which RM2 million was in 2009 and RM4 million in 2010. For 2011, the profit guarantee is RM8 million.