RATIONALE OF THE PROPOSED DISPOSAL. PENTA is undertaking the Proposed Disposal primarily to reduce its CLO, which will be due in October 2011, as well as other bank borrowings. The sale proceeds will be utilised to partially repay the amounts outstanding and subsequently reduce PENTA’s gearing. Such repayment is expected to result in interest savings of approximately RM2 million. In addition to the above, the Proposed Disposal is also undertaken for the following reasons:
RATIONALE OF THE PROPOSED DISPOSAL. The Board considers that the Proposed Disposal is in the interest of the Company, taking into consideration the following factors:
RATIONALE OF THE PROPOSED DISPOSAL. The Group's financial results in recent years have been greatly impacted and will foreseeably continue to face challenging market conditions and competitive business headwinds given the protracted current COVID pandemic conditions. ACL had also to undergo various retrofitting during recent years, as required by the national and local governments in China. Collectively, this has resulted in higher and increasing cost to maintain ACL’s operations, and has thus resulted in the gradual reduction of ACL’s profitability over the years. Therefore, the Company is of the view that it is in the best interest of the Company to dispose ACL given the conditions above and through this sale, unlock further value for the Group with an asset light strategy. After the disposal of ACL, the Group intends to focus on value added specialty chemicals, widen its customer base beyond the textile industry, deliver more cost-effective and eco- friendly solutions and accelerate its distribution of functional chemicals to meet immediate market demands. The Group is also looking to expand into the area of liquid filtration and wastewater treatment systems by licensing technologies on patented nano-membranes.
