MB World sells entire stake in loss-hit subsidiary
PETALING JAYA: MB World Group Bhd has disposed of its entire stake in loss-making subsidiary Emas Kiara Marketing Sdn Bhd (EKM) to the company’s director, Lim Yew Hoe, for RM1 million in a related party deal.
In a filing with Bursa Malaysia, MB World’s board of directors said EKM, which is principally involved in the supply and installation of geosynthetic engineering products, has been running on losses since 2011 and its disposal will prevent MB World from incurring overheads.
“The disposal will allow MB World to cease incurring further overheads for EKM’s operations and allow the company to redirect its resources to those activities identified and in line with the group’s strategies,” the board said.
The company’s original cost of investment in EKM was RM7.5 million and, according to its latest audited financial statements for the year ended Dec 31, 2016, the negative net asset of EKM was RM6.6 million.
“The disposal will result in MB World realising cash proceeds of RM1 million which will be used to supplement the working capital requirements of the group,” its directors said.