Versatile Creative to sell its entire stake in Iris

KUALA LUMPUR: Versatile Creative Bhd plans to sell its 3.98% equity interest in smart card maker Iris Corp Bhd, which is worth RM18.2mil based on the share price at Wednesday’s market close.

However, the packaging and printing solutions provider told Bursa Malaysia that it had not identified any specific purchaser(s) for the 98.42 million shares at this time.

The company said it would seek authority for the proposed disposal from its shareholders at an EGM to be convened, with the mandate to be valid for one year from the date of the shareholders’ approval.

The Iris shares, considered non-core investments, have been recorded as “available-for sale financial assets” in the Versatile group’s financial statements.

Versatile’s wholly-owned subsidiary Versatile Paper Boxes Sdn Bhd is the third largest shareholder in Iris, after Felda Investment Corp Sdn Bhd (19.79%) and Caprice Development Sdn Bhd (9.09%).

Iris itself used to own a 29.83% stake in Versatile, but in September last year it completed the disposal of this stake to a third party for a total gross consideration of RM22.19mil.

Versatile said if it disposed its Iris shares in the open market, the price would be based on the prevailing market prices.

However, if the disposal is done via off-market, the price per share will not be discounted more than 10% against the volume weighted average market price of the Iris shares for the five market days immediately prior to the date of disposal or the date the terms of the disposal are agreed on.

In its announcement to the exchange, Versatile made the assumption that the Iris shares would be sold at RM0.165 each, raising total gross proceeds of RM16.24mil. (Versatile’s original cost of investment in the shares of the identification product provider was about 18.75 sen each.)

Most of the proceeds will be allocated for repayment of bank borrowings (RM13.01mil), while RM2.63mil is earmarked for buying new equipment and machinery.

Versatile said the repayment was expected to generate interest savings of about RM0.76mil annually based on the effective interest rate of 5.82% per annum.

Iris closed trading at 18.5 sen on Wednesday, up half a sen, with 15.26 million shares changing hands.