KUALA LUMPUR: CB Industrial Product Holdings Bhd (CBIPH) has proposed to acquire a 30% stake in Gulf Lubes Malaysia Sdn Bhd (GLM) for RM24mil cash.

       In a filing with Bursa Malaysia, CBIPH said it had entered into a share sale agreement with three individuals to acquire 30 million ordinary shares in GLM, representing 30% of the total issued and paid-up capital of GLM.

       GLM is principally involved in extracting, refining, exporting, importing and trading of oil and gas, namely biodiesel. It owns a biofuels processing facility on a land size of approximately eight acres located at Port Klang Free Zone, Pelabuhan Klang, Selangor.

       The biofuels processing facility includes two biodiesel processing plants with a total annual production capacity of 350,000 tonnes and a refined, bleached and deodorised palm oil processing plant with an annual production capacity of 250,000 tonnes.

       CBIPH said the biofuels facility would require refurbishment before commencing its maiden production as the facility was left idle since its construction in 2009. GLM has yet to commence any operation.

       The issued share capital of GLM is RM100mil comprising 100 million ordinary shares.

       “As announced previously, although CBIPH group holds total 70% equity interest in GLM, the group does not have sole control over GLM considering that strategic and financial decisions of the relevant activities of GLM require unanimous consent by all shareholders.

       “As such, the group was unable to demonstrate a unilateral control and the power to affect the variable returns in GLM and thus, the investment in GLM was accounted as a joint venture in the group’s consolidated financial statement for the financial year ended Dec 31, 2020,” CBIPH said.

       “Upon completion of the proposed acquisition, GLM will become a wholly-owned subsidiary of CBIPH and enable the company to plan and set the direction of GLM to align with the interest of CBIPH Group so as to achieve any potential synergy among the group of companies as well as to resolve the management deadlock in GLM as announced on June 30, 2020,” it said.

       CBIPH said the purchase consideration for the proposed acquisition would be funded entirely by internal generated funds.