In a statement today, Cycle & Carriage said it is obliged to sell the shares, representing a 49% stake in MBM, to Daimler for a consideration of RM66mil. Following the disposal, it will no longer be entitled to MBM's annual dividend of about RM11.2mil even when it is declared.
The disposal is expected to take place on Nov 30, 2019, being the expiry of 12 months from the date of the notice from Daimler.
"Cycle & Carriage Bintang would like to assure all our customers that the recent decision by Daimler AG to exercise their call option on the company’s holding in Mercedes-Benz Malaysia will not impact our commitment or ability to continue delivering exceptional experiences to our customers across our nationwide dealerships in Malaysia.
"All dealerships will continue to provide you with quality sales and aftersales services in accordance with the strictest Mercedes-Benz quality standards supported by Mercedes-Benz Malaysia," said Cycle & Carriage CEO Wilfrid Foo.
CYcle & Carriage said the disposal will not directly affect any of its trading operations, trading performance or support of its customers.
"CCB is a leading Mercedes-Benz dealer group in Malaysia, with 13 sales and aftersales facilities across the country to serve Mercedes-Benz customers.
"It is committed to being the partner of choice of MBM and Mercedes-Benz customers alike, and will continue to work alongside MBM to grow the Mercedes-Benz brand in Malaysia’s luxury car segment," it said.
Trading in Cycle & Carriage shares was halted from 9am to 10am on Monday in light of the announcement. It last traded at RM1.94 a share at Friday's close.