Rex Industry to sell Malaysian ops for RM40 mil cash, shift focus to Indonesian unit
KUALA LUMPUR (Sept 17): Rex Industry Bhd (KL:REX) is selling its entire Malaysian food and beverage operations for RM40 million in cash, as the canned food and drinks maker shifts focus to its more profitable Indonesian subsidiary.
The group said in a filing with Bursa Malaysia on Wednesday it had entered into a conditional share sale agreement with its non-independent executive director and group managing director Darmendran Kunaretnam to sell 100% stakes in Rex Canning Co Sdn Bhd and Rex Trading Sdn Bhd, both of which handle procurement, processing and distribution of its Rex-branded products in Malaysia.
The disposal is deemed a related party transaction and will require approval from shareholders at an extraordinary general meeting, as well as clearance from the Securities Commission Malaysia that the sale is not considered a favourable deal to the new controlling shareholder, ETA Industries Sdn Bhd.
Rex Industry said the move would allow the group to exit its loss-making Malaysian business, which has struggled in recent years following the decommissioning of its Bukit Minyak manufacturing facility in 2023 and rising procurement costs from contract manufacturers.
Proceeds from the disposal will be channelled towards working capital for PT Rex Canning in Indonesia, which manufactures canned seafood for export under contract manufacturing arrangements.
Unlike the Malaysian units that produce and sell Rex-branded products for the domestic market, PT Rex supplies finished goods under customers’ labels and specifications to overseas buyers. The Indonesian arm has been the group’s main profit contributor, posting a revenue of RM85.7 million and profit before tax of RM2.1 million for the 12 months ended June 30, 2025.
The proposed disposal is expected to result in a pro forma loss of RM4.69 million to the group.
The latest move follows changes in Rex Industry’s shareholding. ETA Industries, controlled by chief executive officer Lim Chin Hui, raised its stake in Rex to 55.04% at the close of its mandatory takeover offer for Rex shares it didn't own on July 25. The offer was triggered after ETA Industries acquired a 40.59% block in Rex Industry for RM26.81 million, or 10 sen per share, from Darmendran and Daiman Taipan Sdn Bhd in June. It also bought 39.18% of Rex warrants at half a sen apiece.
The counter closed half a sen or 3.03% higher at 17 sen on Wednesday, valuing the group at RM111.8 million.
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