[The Edge Markets] – POS Malaysia Bhd is selling 51% of its air cargo business in East Malaysia to Asia Cargo Network Sdn Bhd (ACN) for RM40 million cash.
In a bourse filing, Pos Malaysia announced that its wholly-owned unit Pos Aviation Sdn Bhd entered into a share subscription agreement (SSA) and shareholders agreement (SHA) with ACN to dispose of a 51% stake in Pos Asia Cargo Express.
Upon completion of the deal, ACN and Pos Aviation will hold a 51% and 49% stake in Pos Asia Cargo Express respectively. The company will be renamed World Cargo Airlines (WCA).
On the rationale of the stake sale, Pos Malaysia noted that WCA is a non-core business, allowing for the latter to be managed more effectively with improved reliability and service performance by ACN.
The proceeds from the sale will be used by WCA to settle intercompany debts owed to Pos Aviation and Pos Malaysia amounting to RM37.8 million (as of Nov 15, 2019).