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Transit-Mixed Concrete unit to sell RM1m worth of underused assets at a loss
TRANSIT-MIXED Concrete announced on Monday that a subsidiary has agreed to sell certain equipment and machines to concrete supplier Perfect Readymix for RM1.02 million (S$334,332).
The sale of two sets of batching plants, five mixer trucks, three shovels, one generator and other machineries by the 66.5 per cent owned subsidiary, Crescent Concrete, is estimated to result in a loss of RM315,000 for Transit-Mixed, a Mainboard-listed supplier of ready-mixed concrete, concrete pumping services and liquid waste management services.
The company said that the equipment was underutilised due to poor market conditions, and sale proceeds will be used for general working capital.
Perfect Readymix will pay an initial 5 per cent deposit, 25 per cent when the agreement is signed, and the remaining 70 per cent within 30 days from the agreement's date.
The buyer is incorporated in Malaysia and is owned by its directors Wong Kee Kong and Yow Toh Gee. Neither the buyer nor its directors and shareholders are related to Transit-Mixed Concrete or its directors or substantial shareholders.
The net asset value of the equipment being sold was about S$442,000 as at Aug 31, 2018, which was 2.6 per cent of Transit-Mixed's consolidated net asset value of S$16.8 million at that time. The net loss attributable to the assets being sold was about S$104,000 for the half-year ended Aug 31, 2018.
The value of the sale is worth 2.1 per cent of Transit-Mixed's market capitalisation as at Jan 23.
Transit-Mixed Concrete shares last traded flat at S$0.20 on Jan 24.