UMW Holdings Bhd has started the reorganisation of its China-based subsidiary Wuxi Seamless Oil Pipe Co Ltd (WSP), with the purpose to unlock and enhance the value of its investment in WSP.
This reorganisation is expected to lead to a possible listing of the new holding company of WSP. Under its terms, UMW’s sub-subsidiary UMW China Ventures Ltd would acquire 30.6% or 15,300 shares of US$1 each in First Space Holdings Ltd – a company incorporated in the British Virgin Islands.
The remaining 69.4% stake of the BVI company, or 34,700 shares, are held by Piao Longhua via his company Expert Master Holdings Ltd.
UMW’s subsidiary UMW Ace (L) Ltd, Piao Longhua and his associates would then transfer their 51% and 49% equity in WSP US$23.68 million and in First Space Holdings Ltd for US$22.75 million respectively. Upon completion of the dealm WSP would be a wholly owned enterprise.
UMW Holdings said that UMW China Ventures and EMH are going to set up a new company in the Cayman Islands, known as Eastar Group Holdings Ltd (new company), where UMW China Ventures will hold 30.6% and EMH the remaining 69.4%. The new company would then acquire UMW China Ventures and EMH’s shares in FSHL via a share swap. Upon the completion of the restructuring exercise it may be used as the listing vehicle. After the restructuring, UMW’s interest in WSP shall remain unchanged at 30.6%.