KUALA LUMPUR (July 18): Paper milling and packaging solutions provider Muda Holdings Bhd's 70%-owned unit has exercised its put option to sell the remaining 16.88% stake it holds in a Singapore waste paper recovery and processing company — KL Resources Pte Ltd — for RM23.06 million — to realise its investment and generate funds for working capital.

The subsidiary, Intrapac (Singapore) Pte Ltd, inked an agreement to dispose of the stake to Tansfield Ltd for S$6.71 million on Monday (July 17), said Muda in a bourse filing.

Intrapac Singapore, which originally owned 56.275% of KL Resources' equity, first sold 22.51% to Tansfield in 2013 for S$7.28 million, after inking an agreement in April 15 that year for the sale. The agreement also provided Tansfield options to buy the remaining shares Intrapack Singapore had in KL Resources, five years after the first stake sale.

The first call option allowed Tansfield to buy 50% of those remaining shares for about S$4 million, which Tansfield exercised on May 28, 2021, with the sale completed in November that year. Intrapac Singapore then issued a put option on Jan 26 this year to Tansfield to exercise its option to buy the remaining shares it held for S$6.71 million, which Tansfield has now taken up.

The disposal is expected to give rise to a proforma gain of about RM1.91 million to Muda Holdings for the financial year ending Dec 31, 2023, or an increase in earnings per share of 63 sen, based on its existing 305.05 million issued shares. “The actual gain from the disposal can only be ascertained upon the completion of the disposal,” the group said.

The disposal is expected to be completed in 30 days.

Muda's shares closed two sen or 1.38% lower at RM1.43 on Tuesday (July 18), valuing the group at RM436.2 million.