Dialog Group Berhad ("DIALOG”) wishes to announce that on 27 August 2024, its indirect subsidiary, Dialog (Labuan) Ltd ("DLL") has entered into an agreement to dispose of its entire 60% equity stake in Dialog Jubail Supply Base Company Limited (“DJSB”) to Sedres Trading & Maritime Services Co Ltd (“Sedres”), for a total cash receipt of SAR47.5 million (approximately RM55.0 million) comprising of sale consideration of SAR3.0 million (approximately RM3.5 million) (“Sale Consideration”) and dividends of SAR44.5 million (approximately RM51.5 million) to be received prior to completion (“Shares Sale”).
DJSB is principally involved in the provision of logistic services of a supply base and trading of base oil in Saudi Arabia. DLL and Sedres are currently shareholders in DJSB holding equity stakes of 60% and 40%, respectively. DLL is a company incorporated in Labuan, Malaysia and, DJSB and Sedres are companies incorporated in the Kingdom of Saudi Arabia. The business landscape is evolving in Jubail Port area wherein most of the heavy lifting work that DJSB provides is expected to decrease gradually and favouring normal logistics services only. With that and with Sedres’ interest to take over DJSB as a locally owned company in Saudi Arabia, it is an opportune time for DIALOG to divest its stake in DJSB.
The disposal involves the sale of 1,200 ordinary shares or DLL’s entire 60% equity interest in DJSB.
The Sale Consideration was based on a willing-buyer willing-seller basis, after taking into account DJSB’s unaudited adjusted net assets as at 30 June 2024 of SAR77.6 million.
DLL’s original cost of investment in DJSB was SAR1.2 million (approximately RM1.4 million) which was made in 2011 and the Shares Sale resulted in a gain to DIALOG of SAR0.9 million (approximately RM1.0 million). The sale proceeds will be used for working capital purposes.
DJSB will cease to be a subsidiary of DIALOG upon receiving total cash receipt and with effect from the date of the registration of the change of shareholders of DJSB with the relevant authorities in Saudi Arabia, expected to be within next 9 months.
The Shares Sale has no effect on the share capital and substantial shareholders’ shareholdings of DIALOG and has no material impact on the earnings, net assets and gearing of DIALOG.
The Shares Sale does not require approvals from the relevant authorities and the shareholders of DIALOG.
None of the directors of DIALOG, major shareholders of DIALOG and/or persons connected with them have any interest, whether direct or indirect, in the Shares Sale.
This announcement is dated 27 August 2024.
