BRDB is believed to be in talks with a Chinese company to hive off its 56.76% stake in loss making chipboard manufacturer Mieco.
However, details of the Chinese party or the discussions, which are said to be still preliminary, are not available.
It is no secrets that BRDB has been looking to divests its interests in Mieco for some time now to concentrate on its more lucrative property development business.
BRDB will sell if the price is right.
Mieco’s net asset value per share as at March 31, 2010, was rm1.52. The company’s cash and cash equivalents stood at rm1.47 million while borrowings totaled RM169.9 million. It posted a net profit of rm1.4 million for the quarter from a net loss of rm22.6 in the previous corresponding period.
If BRDB is successful in divesting its stake, the disposal could pare debts and fund future projects. As at March 31, 2010, it had cash and cash equivalents of RM144.36 million while total borrowings stood at RM801 million, The company’s net debt of rm657.58 million translates into a gearing ratio of 40%.
Having off its stake in Mieco will enable BRDB to focus on what it does best – property development, which accounts for the bulk of BRDB’s earnings.
For FY2009, all of brdb’s profit came from the property segment as its manufacturing arm, housed under Mieco, made a loss of RM14.3 million.
The BSC will be one of the main earnings drivers going forward as rents are expected to be stronger.
17 hours ago
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