April 11, 2022
 

Malaysia's LTKM to divest poultry operations

LTKM Bhd has put forward a series of proposals to divest its chicken egg production business to its major shareholder and venture into the provision of electronic manufacturing services (EMS).

In a statement, loss-making LTKM proposed that its major shareholder, Ladang Ternakan Kelang Sdn Bhd, acquires its chicken egg production operations for RM158.83 million (US$36 million). This will be accompanied by a proposed special dividend and capital repayment of RM1.1098 (US$0.26) per share to shareholders amounting to RM158.83 million, following which Ladang Ternakan Kelang, will use its portion of the dividend to help fund its purchase of the operations.

Subsequently, there will be a proposed consolidation of two existing LTKM shares into one share.

Meanwhile, LTKM also proposed to acquire 100% equity interest in Local Assembly. The vendors of Local Assembly will become the new controlling shareholders of LTKM with a 56.5% stake in the company.

LTKM proposed that the company's name be changed to LA Technology Bhd following the completion of the exercise.

"At its core, the proposals seek to reward our shareholders from the proceeds of the disposal of the company's existing poultry business while at the same time, allow them to continue participating in the new EMS business following the proposals," said LTKM executive chairman Datuk Tan Kok in a statement.

He said the proposed disposal comes amid a challenging operating landscape that has impacted the company's ability to pay dividends over the past two financial years. These challenges to the poultry industry, he said, include overcapacity, lower average selling price of eggs, high raw material prices and difficulty in controlling disease outbreaks.

"Concurrent with the proposed disposals, we believe the proposed acquisition of the EMS business is an opportunity to create value for our shareholders through a business that is viable and profitable," he added.

- The Star