SINGAPORE: SGX-Catalist listed MeGroup Ltd., through Menang Nusantara Holdings Sdn. Bhd., has entered into binding term sheets to acquire an additional 250,000 ordinary shares in MJN Motors Sdn. Bhd. from Mr Wong Sai Hou and Mr Tan Kian Boon.
The completion of the acquisition shall take place no later than 30 September 2019.
Wong Cheong Chee, Executive Chairman and CEO of MeGroup Ltd. commented: “By increasing our stake in MJN Motors, we can consolidate our interest and potentially improve future earnings. Last year, Honda was Malaysia’s top non-Malaysian car marque and we want to capitalise on the strong demand trend for Honda cars in Malaysia. We also expect to see an increase in business from the Honda 4S Dealership in Cheras, which will be offering 4S (body and paint) services upon the completion of the upgrade works to its current facilities, as well as the new Honda 3S Dealership in Kuala Selangor, which has been operating at its interim location for less than half a year.”
MJN Motors owns and operates the Group’s Honda dealerships and the Sale Shares comprise 25% of the issued and paid up share capital of the MJN Motors. After the completion of the proposed acquisition, it is intended that both Mr Tan and Mr Wong will continue to serve as directors of the MJN Motrs.
MeGroup is currently the legal and beneficiary owner of 55% of the issued and paid up share capital of the MJN, and upon completion of the proposed acquisition, MeGroup will increase its equity stake in the MJN to 80%.
The consolidation of the Group’s interest in MJN Motors would also enable it to participate in any potential upside in the event that Honda continues to sell well in Malaysia in 2019 and in the future.
The actual aggregate purchase consideration payable by MeGroup is contingent on the financial performance of MJN Motors for the financial years ended 31 March 2019 and 31 March 2020. [the_ad id=”31605″]