Collin Goonting a/l OS Goonting, executive chairman Ng Min Lin, and North Cube Sdn Bhd shareholder Melvin Lim Chun Woei (from left). MAG Holdings Bhd independent director Collin Goonting a/l OS Goonting, executive chairman Ng Min Lin, and North Cube Sdn Bhd shareholder Melvin Lim Chun Woei.
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KUALA LUMPUR, Malaysia (July 2): At an extraordinary general meeting (EGM) today, MAG Holdings Bhd shareholders approved the purchase of a 100 percent ownership interest in North Cube Sdn Bhd for RM200 million, a deal worth more than the company’s market capitalization.
MAG stated in a statement that 99.9% of shareholders voted in favor of the agreement, which will be funded by a cash consideration of RM60 million, the issuance of 300 million shares at 20 sen per share, and the issuance of 400 million additional redeemable preference shares (RPS).
The proposed transaction is also backed by a profit guarantee of at least RM18 million on a consolidated basis for the 18-month period ending June 30, 2022.
In Tawau, Sabah, North Cube has 133 prawn farming ponds, which will increase MAG’s breeding capacity to 4,000 tonnes per year.
Following the purchase of the Wakuba Farm in December 2019, MAG made its first step into aquaculture with the purchase of the Wakuba Farm, which has 102 prawn production ponds and can produce 2,000 tonnes of vannamei prawns (white leg shrimps or king prawns) per year.
“MAG Group’s combined power of 235 prawn cultivation ponds and processing units allows it to harvest both North Cube and its existing farms into completed products, resulting in economies of scale and synergy for the enlarged MAG group,” it said.
The purchase of North Cube, according to MAG executive chairman Ng Min Lin, is earnings-accretive and would enable MAG and the company to harness their combined strengths and accelerate their expansion plan with continuous growth to emerge as a prominent player in Malaysia’s aquaculture industry.
“Having [our] own processing plant is a critical vertical integration in the prawn farming supply chain that gives operational and cost benefits to the wider MAG company. We’re also looking at producing new high-margin value-added products, such as ‘peeled and deveined’ and ‘cooked’ prawns, for a wider worldwide market “Ng went on to say.
The counter was stable at 20.5 sen at 3.54 p.m. today, valuing the group at RM154.11 million./n
