Pos M’sia to buy 20% of Transmile for RM253m

POS Malaysia Bhd, the country’s national postal company, said it will buy 20.3 per cent of Transmile Group Bhd for RM253.1 million (S$115 million) in stock and cash to expand its activities and boost earnings.

Pos Malaysia, already a client of Transmile, will pay the equivalent of RM6.25 a share for the stake, the company said in a statement to the stock exchange. That’s a 12 per cent discount to the airfreight delivery company’s last traded price.

For 12.4 per cent of Transmile, Pos will transfer its 30 per cent stake in closely held Transmile Air Services Sdn to the publicly traded company. It’ll pay cash of RM98 million for the remaining 7.9 per cent.

The postal company is taking a direct stake in Transmile in the expectation that faster economic growth in Malaysia and the region will drive profit at Transmile, which is expanding its fleet to carry freight to destinations as far as the US.

The subscription will ‘unlock Pos Malaysia’s investment in the unquoted Transmile Air Services in return for quoted Transmile Group shares’, it said in a statement. The purchase is ‘a strategic investment’. Pos Malaysia first bought shares in Transmile Air Services, a 70-per-cent-owned unit of Transmile, in July 1994, lifting its stake to 30 per cent three years ago.

Transmile, owned by Malaysian tycoon Robert Kuok, currently flies to countries including China and Thailand and wants to start operations to the US by the end of this year. In the first quarter, sales rose 13 per cent from a year earlier to RM59.3 million. Net income rose 17 per cent to RM7 million.

Its stock has risen 43 per cent this year, compared with a 5.3 per cent gain for the benchmark Kuala Lumpur composite index. It rose 10 sen, or 1.4 per cent, to RM7.10 at the close. – Bloomberg