MAI-listed ND Rubber Plc (NDR) has acquired Fung Keong Rubber Manufactory Malaya Sdn Bhd in its entirety from Consistent Record Sdn Bhd as part of continued expansion in Malaysia.
ND Rubber's board of directors on Sunday approved the acquisition of 20 million shares of Fung Keong Rubber from Consistent Record at a par value of one ringgit (7.93 baht), accounting for 100% of total paid-up capital of Fung Keong Rubber.
Transaction value equals 53 million ringgit, which is calculated by using 55 million new ordinary shares valued at 28.6 million ringgit.
Payment will be made after the resolution of ND Rubber's extraordinary general meeting on Jan 18. The company expects to complete the transaction within 60 days.
After the transaction is completed, Consistent Record will hold ND Rubber's ordinary shares for 20.31% of paid-up capital and appoint a representative as ND Rubber's director, even though such a representative is not an executive who has power in normal operations of ND Rubber.
This transaction is categorised as a connected transaction under Stock Exchange of Thailand (SET) regulations.
"The acquisition of Fung Keong Rubber's shares is a transaction of which ND Rubber expects immediate benefits because Fung Keong Rubber has been a customer of ND Rubber for more than 10 years and has continuously increased in sales of motorcycle tires and tubes in Malaysia with four distribution warehouses," ND Rubber said in a filing with the SET.
"Therefore, after ND Rubber has a consolidated financial statement with Fund Keong Rubber, ND Rubber's profit will immediately increase. In addition, ND Rubber has a potential to expand [its] Malaysian market share and retain existing customers."
Since Fung Keong Rubber is a manufacturer of motorcycle tires and tubes, its personnel have both expertise in market distribution and knowledge of manufacturing, a strong advantage for ND Rubber's production development, the company said.
"This business acquisition supports business development and results in higher profit, which [benefits] shareholders," ND Rubber said.
ND Rubber reported a net profit of 33.13 million baht for the first nine months of 2017, with total assets valued at 713 million and total liabilities worth 277.07 million.
NDR shares closed yesterday on the Market for Alternative Investment at 3.82 baht, up six satang, in trade worth 2.17 million baht.
