YTL Cement (Hong Kong) Ltd confirmed the sale of its 100% equity interest in Zhejiang Hangzhou Dama Cement Co Ltd. Dama Cement is a manufacturer and seller of cement and cement products based in Hangzhou, China.
YTL Cement’s sale of the stake ended its 14-year association with Dama Cement. A statement which YTL Cement issued said that the finalization of the sale took place on Apr 30, 2021.
The YTL Cement group’s aggregate returns from the investment in Dama Cement stand at around 1.3 billion yuan (RM830 million). These aggregate returns date back to its first investment in 2007. Over the same period, YTL Cement’s profits total around RM250 million. YTL Corporation declined to disclose Dama Cement’s disposal price.
Why the Equity Interest Was Sold
According to YTL group executive chairman Tan Sri Francis Yeoh Sock Ping, the high value of the investment in Dama Cement made now the ideal time for the company to sell the equity interest.
“Through our investment in China, the largest cement producer in the world, we have been able to enhance our existing capabilities and build on our knowledge of the industry. Learning from its advanced technology, operational knowhow, procurement, logistics, and distribution systems, this exit is part of our strategy to concentrate on achieving a similar position of leadership in our key domestic, export, and regional markets,” he said.
YTL Cement group managing director Datuk Seri Michael Yeoh Sock Siong added that the disposal is in line with the group’s emphasis on establishing itself as a leader in the Southeast Asian cement market. YTL Cement currently conducts business operations in Malaysia, Vietnam, Singapore, and Myanmar.
“Dama was our first substantial foray into China’s cement industry, a major supplier in Hangzhou. The vital insight and knowledge that we have gained will be used in our plans to expand our operations within Southeast Asia,” he said.
In 2019, YTL Cement took a step highlighting its emphasis on local and regional operations. It expanded its Malaysian operations by acquiring a 51% stake in Lafarge Malaysia Bhd, which is now known as Malayan Cement Bhd. After the acquisition, YTL Cement received a mandatory general offer extended for the remainder of the shares it did not possess. Today, YTL Cement owns 76.98% of the stakes of Malayan Cement.
YTL Cement’s divestment of Dama Cement did not have any impact on YTL Corporation’s shares. The most recent figures showed that YTL Corporation’s shares closed at RM0.705. The total market of these shares was RM7.79 billion with a total of 2.46 million shares being active.
YTL Cement is a private enterprise. It became private by way of a share swap exercise with YTL Corporation. This share swap exercise occurred in 2012.
5th May 2021 16:18
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