KUALA LUMPUR (July 12): Only a month after mooting to diversify into trading of building materials, machineries and equipment, office furniture maker AHB Holdings Bhd is now eyeing a venture into the electric vehicles (EV) business.

The company is eyeing a 51% equity interest in automotive distributor CAF Motors Sdn Bhd for an indicative consideration of RM10 million in a cash and shares deal.

In a bourse filing on Wednesday (July 12), the group said it entered into a non-binding term sheet with CAF Motors’ sole shareholder, CAF Global Tech Sdn Bhd for the acquisition.

According to AHB, CAF Motors is principally involved in the business of distributing, importing and exporting electrical and non-electrical motor vehicles.

Indicatively, AHB said RM8.5 million of the consideration is to be satisfied via cash and consideration shares, while the remaining RM1.5 million is to be fully paid in cash.

“The final purchase consideration and the breakdown for the cash and consideration shares shall be determined after obtaining a valuation opinion from an independent valuer for the proposed acquisition,” the group noted.

AHB said the proposed acquisition sets the group’s initial venture into the EV business, which it notes is in line with its direction to provide an alternative source of income for the group over the long term.

“A detailed announcement on the proposed acquisition will be made upon execution of the definitive agreement for the proposed acquisition,” it added.

This is the third new venture announced by the company this year, amid the emergence of new substantial shareholders in the period. In June, AHB proposed to also diversify into the trading of building materials, machineries and equipment in view of rising costs in the increasingly competitive furniture business, and the group’s "lacklustre" financial performance.

Four months before that, the group obtained its shareholders’ approval in February to diversify into property development through the acquisition of 3,849.25 square metres of land in Kuala Lumpur for RM9.2 million for a planned residential development.

Among AHB's new substantial shareholders is Datuk Seri Tan Choon Hwa, who bought 5.426% in the group on July 7. Prior to that in April, RHB Trustees Bhd emerged as AHB’s substantial shareholder for Kenanga Investors Bhd, the investment manager of the Kenanga Islamic Absolute Return Fund, after acquiring a 15.957% stake in the group. It then upped its stake to 28.69% as part of Kenanga Investors' portfolio investment.

It is worth noting that in May, Tunku Kamariah Aminah Maimunah Iskandariah Sultan Iskandar — the eldest sister of the Sultan of Johor, Sultan Ibrahim Almarhum Sultan Iskandar — joined AHB's board as its non-executive chairman.

For the second quarter ended March 31, 2023 (2QFY2023), AHB’s net loss grew 57.41% to RM3.7 million from RM2.35 million a year earlier, which extended its spell in the red to 13 consecutive quarters. Revenue declined 5.6% to RM1.23 million from RM1.3 million.

Shares in AHB closed one sen or 6.67% lower at 14 sen, giving the group a market capitalisation of RM85.16 million.