The Berjaya Enviro Holding share sale agreement between Berjaya Corp Berhad and Naza Corporation Holdings Sdn Bhd that was held yesterday.
PETALING JAYA: Berjaya Group founder and adviser Tan Sri Vincent Tan Chee Yioun said a joint venture between the group and Naza Group has filed a legal suit against the Finance Ministry (MoF) for terminating a letter of intent (LoI) offered to the joint-venture company.
Tan said the LoI in relation to a contract to supply government vehicles was terminated three months after former Prime Minister Tan Sri Muhyiddin Yassin took over from the previous government.
“The government terminated us and gave the contract to Spanco Sdn Bhd, when actually we provided a bidding price of RM700mil cheaper compared to them,” he said.
“So we have filed a legal suit against the MoF and Spanco, and we are ready to go to court on this,” Tan said during a press conference after the signing ceremony between Berjaya Corp Bhd (BCorp) and Naza Corp Holdings Sdn Bhd regarding the sale of Berjaya Enviro Holding Sdn Bhd (BEnviro).
BCorp is selling BEnviro to Naza Corp Holdings as part of the conglomerate’s move to unlock value and monetise its investments.
Its wholly owned subsidiary, Berjaya Group Bhd (BGroup), will sell its 100% interest in BEnviro for RM700mil cash.
This is based on a valuation of 18.4 times price-to-earnings ratio and a profit guarantee of RM38mil for the next three years.
BCorp’s joint chief executive officer, Vivienne Cheng Chi Fan, said during the signing ceremony between the two groups yesterday that the proposed disposal is expected to improve group earnings, net assets and gearing significantly, as the divestment will offer an estimated gain on disposal of RM490.74mil.
Cheng said the sale of BEnviro will generate substantial financial returns from Berjaya’s investments, as the gains will enhance the net assets and the utilisation of the proceeds is expected to contribute positively to the future earnings of the group.
“The decision to divest BEnviro was made after careful consideration and analysis of the current market conditions and strategic goals of the group,” she said.
Naza Group executive chairman SM Nasarudin SM Nasimuddin said the acquisition presented a unique opportunity for the group to venture into the green economy, capitalising on growth opportunities in the municipal solid waste, scheduled waste and waste-to-energy sectors.
“Naza Group has been exploring new sectors that align with its vision of sustainable development, resource efficiency and upholding the highest standards of environmental stewardship,” he said.
Nasarudin said the waste management businesses offered predictable, steady income streams and the industry was non-cyclical in nature, both of which were key considerations in the acquisition decision.
BEnviro undertakes solid waste management with engineered sanitary landfill, landfill gas management via renewable energy generation from landfill gas and scheduled waste management through recycling, treatment and disposal. Its waste management projects include the Bukit Tagar Sanitary Landfill in Selangor.
Upon completion of the proposed disposal, BGroup and BEnviro will form a joint venture company to collaborate on new projects in the environmental space in Malaysia as well as abroad, specifically in the Philippines.
The transaction is expected to be completed by the end of February or March 2024.
