Strategic Divestment to Fuel Atlan’s Growth
Atlan Holdings Bhd has announced a strategic plan to dispose of its wholly-owned subsidiary, United Industries Holdings Sdn Bhd (UI), to Singapore-based Duty Free International Ltd (DFIL) for a cash consideration of RM175 million. This proposed transaction is a key part of Atlan’s strategy to bolster its financial position, providing a significant cash injection that will be used to support its working capital needs and, more importantly, to drive the expansion of its property and hospitality business segments. The company believes this move will not only monetize its investment in UI but also streamline its corporate structure, which is expected to enhance operational efficiency and sharpen the group’s strategic focus. This financial realignment marks a clear pivot for Atlan as it prepares to channel resources into new, high-growth opportunities.
Retaining Influence and Empowering a Subsidiary
Despite the proposed sale, Atlan Holdings is structured to retain substantial control over the subsidiary, United Industries. As Atlan holds a significant 75.53% stake in DFIL, the transaction will result in UI becoming a wholly-owned subsidiary of DFIL, with Atlan transitioning from a direct 100% shareholder to an indirect 75.53% shareholder. This unique arrangement is a core component of the deal, as it allows UI to gain enhanced financial flexibility by accessing and utilizing DFIL’s surplus funds. This capital will be crucial for UI, which is a manufacturer and supplier of automotive parts, to finance its own expansion plans and pursue new investments in the automotive industry. The restructuring is intended to position UI for long-term growth and competitiveness in a dynamic market by providing it with the resources it needs to evolve and capitalize on new business opportunities.
Proceeds Earmarked for Key Development Projects
The RM175 million in proceeds from the proposed disposal of United Industries Holdings are strategically earmarked for a series of key initiatives that are central to Atlan’s future growth plans. A significant portion of the funds will be allocated to the redevelopment of its property located in Jalan Ampang, a project that is expected to enhance the value of its property portfolio. The remaining capital is intended to fund other potential investments that are projected to deliver meaningful contributions to the group’s revenue and profit in the coming years. This clear allocation of capital demonstrates Atlan’s long-term vision to optimize its business portfolio by divesting from a non-core manufacturing asset and reinvesting the proceeds into its more strategic property and hospitality ventures, thereby enhancing overall shareholder value.
