READY-MIX concrete provider Pan-United Corporation : P52 0% entered into a sale-and-purchase agreement on Friday (Oct 14) to dispose of its 49 per cent stake in Pacific Granitama (PTPG), a company that mines, produces, sells and exports aggregates and other materials from a Riau Island quarry.

In its bourse filing, the company said it was selling its entire stake in the company for S$3.5 million to Mega Alam Perkasa, which is 90 per cent owned by Wiyansand Nurdin and 10 per cent owned by Johan Nurdin.

Wiyandsand Nurdin is a director of PTPG, and Johan Nurdin is its commissioner and also the majority shareholder of Sandico Synergy Resources (SSR), the company that holds the remaining 51 per cent of PTPG.

As at Jun 30, 2022, the book value and net tangible asset value of PTPG were approximately S$7.5 million and S$6.7 million respectively.

Pan-United noted that for PTPG to apply for a new mining licence after its existing licence expires in November 2023, it must be 100 per cent owned by Indonesian nationals.

The purchase price of S$3.5 million will be paid for in seven tranches of S$500,000 every quarter to Pan-United.

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The company noted that as the net book value of the sale shares was approximately S$5 million as at Sep 30, 2022, the loss on the proposed disposal amounts to about S$1.5 million, assuming that the proposed disposal is completed on Dec 31, 2022.

It added that the net proceeds from the disposal are approximately S$3.4 million, which will go towards the group’s working capital requirements and other future projects undertaken by the group.

If the transaction had been completed on Jan 1, 2021, the company’s pro forma net asset value per share as at Dec 31, 2021 would fall to S$0.288 from S$0.293, while its pro forma earnings per share would fall to S$0.221, from S$0.267 for the financial year ended Dec 31, 2021.

As the company sources aggregates from PTPG, it has also entered into a supply-and-purchase agreement to buy aggregates and other materials from quarries operated by both PTPG and SSR.

Under the agreement, Pan-United Concrete will have the right to purchase up to 90 per cent of the aggregates and other materials produced from these quarries for an initial term of five years from the closing date, with the option for another two-year extension.

Shares of Pan-United climbed 4 per cent or S$0.015 to S$0.395 on Friday, before the announcement.