KUALA LUMPUR (July 27): Kanger International Bhd said today the bamboo flooring manufacturer had obtained shareholders’ approval to acquire a 51% stake in building materials trading firm Sung Master Holdings Sdn Bhd for RM94.79 million in a cash and share deal which will be partly financed by money raised from the subscription of 769.51 million new Kanger shares by Kanger executive director Steven Kuah Choon Ching.

In a Bursa Malaysia filing today, Kanger said the majority of shareholders who attended Kanger’s virtual extraordinary general meeting (EGM) today had duly passed the resolutions on the Sung Master stake acquisition and subscription of the new shares in Kanger by Kuah, whose Kanger stake will rise to around 20% from about 1% upon completion of the new share subscription.

Kanger had initially announced on April 26, 2021, the proposed Sung Master stake buy and the Kanger share subscription by Kuah.

According to Kanger’s Bursa filing on that day, Kanger had then proposed to buy 1.02 million shares representing a 51% stake in Sung Master for RM94.79 million from Sii Tung Nai, Sii Tung Aik and Lim Shwu Huey.

"The purchase consideration shall be satisfied via a combination of cash payment of RM52 million whilst the remaining purchase consideration of RM42.79 million shall be satisfied via the issuance of 713.16 million new ordinary shares of Kanger at the issue price of six sen per Kanger share,” Kanger said.

Kanger had also announced the planned subscription of the 769.51 million new Kanger shares representing about 30% of Kanger’s total number of issued shares then at 2.57 billion by Kuah at six sen each.

According to Kanger, the company’s number of issued shares will expand to 4.05 billion and 4.34 billion under the minimum and maximum scenarios respectively after including the new Kanger shares to be issued under the proposed Sung Master stake buy and Kanger share subscription by Kuah.

Kuah’s stake will expand to 19.6% and 18.3% of Kanger’s enlarged issued share capital under the minimum and maximum scenarios respectively, Kanger said.

Tung Nai, Tung Aik and Lim will also emerge as shareholders in Kanger due to the new Kanger shares they will receive as payment for the acquisition of the Sung Master stake.

Based on the maximum scenario, Tung Nai and Tung Aik will have 12.9% and 3.2% stakes in Kanger respectively while Lim will hold a 0.3% stake, according to Kanger.

In a separate statement today, Kuah said the synergies that Kanger will be able to leverage from the acquisition of the Sung Master stake will benefit Kanger on multiple fronts, especially with regards to supporting Kanger's property and construction business segments. 

He said the acquisition enables Kanger to widen its product offerings from the existing business of manufacturing and trading of bamboo flooring to also include other building materials such as timber flooring, tiles, bulk cement and concrete.

"At present, the group (Kanger) is working on construction projects which have an orderbook of approximately RM1 billion,” Kanger said.

At 4.05pm today, Kanger shares were traded unchanged at seven sen, giving the company a market capitalisation of about RM196 million.

Kanger's latest-reported number of issued shares stood at 2.8 billion.

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