KUALA LUMPUR: MMAG Holdings Bhd's wholly owned subsidiary, Line Clear Ventures Holdings Sdn Bhd (LCVH) is disposing 14.4 million ordinary shares or 15 per cent stake in Line Clear Express & Logistics Sdn Bhd (LCEL) to KTG Bhd for RM22 million cash.
In a statement today, MMAG said the 15 per cent investment in LCEL by KTG would form a strategic partnership between MMAG Group and KTG Group.
Moreover, by leveraging on KTG's expansion plan via its incoming wholly-owned subsidiary, Line Haul Sdn Bhd (LHSB) and its fleet of new motor vehicles and freight sharing network platform, LCEL is able to reduce its capital investments and costs of operations which will bring enhanced levels of service that are required in 'last-mile' delivery.
Consequently, LCEL could offer a more competitive pricing for its services, the company in a statement today said.
LCEL is currently engaged in the courier and logistic business, which provides services such as warehousing, fulfilment, last mile delivery, customs clearance, e-commerce customised services and special/security handling delivery via air, sea and land freight.
Currently, LCEL has network of 74 hubs, depots and stations/branches located throughout Malaysia and a fleet of over 500 vehicles including trucks, vans, line haul vehicles, prime movers and motorcycles.
MMAG directors believe the partnership between MMAG Group and KTG Group will provide mutual business and support.
This also provides MMAG Group an advantageous platform and better earnings prospect in the future as well as reduces its dependency on internal resources for the network expansion, it said.
The company said the proceeds received from the proposed disposal will be mainly used for working capital purposes and to fund for any future business expansions to be undertaken by the group and/or any future prospective business, project and/or acquisition to be identified by the group.
Barring any unforeseen circumstances, the board expects the proposed disposal is expected to be completed in the second quarter of year 2021.
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