Sime Darby to divest Weifang Port companies in RM1.27 billion deal

KUALA LUMPUR – Sime Darby Overseas (HK) Ltd (SDOHK) will be divesting its Weifang Port companies for RMB1.92 billion (approximately RM1.27 billion) after entering into share sale agreements with SPG Bohaiwan Port Group Company Ltd.

This marks a full exit from the non-core ports business and the share sale agreements are expected to be completed by the fourth quarter of 2022, it said in a statement today.

SDOHK, an indirect wholly-owned subsidiary of Sime Darby Bhd, will receive an indicative sum of RMB541 million (approximately RM357 million) as repayment of shareholder loans.

The proceeds from the sale of Weifang Port companies will be utilised for future investments in the group’s core businesses in the industrial and motors sectors, for capital expenditure and/or the repayment of short-term borrowings.

“Sime Darby has in recent years been progressively divesting assets, which have been identified as non-core, as part of the group’s efforts to streamline its portfolio and redeploy capital to support the growth of its core businesses of industrial and motors.

“These divestments include the disposal of a water management business in Weifang, interests in Tesco Malaysia, Eastern & Oriental Bhd and three river ports in Jining,” it said in a statement.

SPG Bohaiwan Port Group is part of Shandong Port Group Co, which was incorporated by the Shandong provincial government to consolidate port assets in the province.

“These last few years have been a challenge for the ports business, and we are grateful to the Shandong provincial government for finalising this agreement to enable us to unlock value, which we can now channel towards growing our core businesses.

“China remains one of our most important markets contributing almost 40% of revenue for the group. We look forward to channelling the proceeds we receive from this divestment into expanding and strengthening our position in the industrial and automotive sectors in China, as well as continue to scope for opportunities in other markets,” said Sime Darby group CEO Datuk Jeffri Salim Davidson. – The Vibes, July 4, 2022