KUALA LUMPUR (May 11): Muar Ban Lee Group Bhd (MBL) has incorporated a wholly-owned indirect subsidiary PT Muar Ban Lee Engineering (PT MBLE) in Kabupaten Deli Serdang, Sumatera Utara, Indonesia on Thursday (May 11). 

The group said PT MBLE, under its wholly-owned subsidiaries Muar Ban Lee Engineering Sdn Bhd (MBLE) and Muar Ban Lee Technology Sdn Bhd (MBLT), will carry out the business of trading, consisting of automated kernel crushing plants, oil seed expellers and related parts.

In MBL's stock exchange filing on Thursday, it said the incorporation is “fair and reasonable” and on normal commercial terms, which is in the best interest of the company and their shareholders as a whole.

MBL added that the incorporation is not detrimental to the interest of the minority shareholders as the incorporation is expected to contribute positively to the consolidated future earnings of the group.

Notably, MBL disposed of a 51% stake in an Indonesian unit PT Serdang Jaya Perdana (SJP) for 36 billion rupiah (RM11 million) last November.

Then, MBL cited non-involvement in the management of SJP, as well as low returns and profits over the past few years with uncertainty in the industry's outlook.

SJP was engaged in palm kernel crushing plant operations where crude palm kernel oil is extracted from palm kernel.

For PT MBLE, it has a share capital of IDR10 billion, comprising 10,001 ordinary shares which will be held by MBLE (70%) and MBLT (30%), the group said.

MBL said funding for the incorporation in PT MBLE by MBLE and MBLT is sourced from internally generated funds.

The director of PT MBLE is Johan Juniver while Chua Kang Sing is commissioner. Chua is also a director in MBLE and MBLT.

“The related parties are deemed interested in the [incorporation] and have abstained themselves from board deliberation and voting on the resolution approving the incorporation,” MBL noted.

Shares in MBL closed unchanged at 51 sen on Thursday, giving the group a market value of RM125.55 million. The counter has climbed 34.21% in the past six months.

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