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MISC to sell logistics business for $88m

MISC to sell logistics business for $88m
Malaysian national shipowner MISC is jettisoning its logistics business  which contributes only about 4% to revenue in a bid to consolidate its operations.

The logistics arm, MISC Integrated Logistics (MIL), has been on the market for almost two years, with several prior deals falling through.

Swift Logistics, a local logistics service provider that is linked to stationery company Pelikan International Corp  president and ceo Loo Hooi Keat, will acquire MIL for up to MYR358m ($88.3m), MISC said in a stock market announcement.

Loo is listed as an advisor to the Swift Group and he is not new to the logistics industry, having been a key driver of previously listed logistics firm Konsortium Logistik. “The latest deal marks the return of Loo to the haulage business on a large-scale basis,” local reports quoted an industry executive as saying.

The price includes Swift undertaking to repay a MYR66.8m shareholders loan owed by MILS to MISC and receivables of up to MYR34m. The logistics business itself is valued at MYR257.2mil based on its audited net asset as at 31 December 2015.

The move is also seen as providing a good solution with Swift looking to grow its business and potentially looking at an initial public offering in the near future while MISC has been trying to divest its non-core logistics business.

In March 2014, MISC announced a plan to sell its entire interest in MIL to Golden Age Logistics (GAL), a unit of Utusan Printcorp, for MYR250m cash but the deal was called off in January last year because GAL was unable to fulfil its obligations for completion as stipulated in the agreement for sale and purchase.

MILS’ principal activities include the provision of project logistics and supply chain management such as freight management, forwarding, transportation, and dry and cold warehousing.

It has over 200 prime movers, 800 trailers and 700,000 sq ft of total covered storage facility, while Swift Logistics has 225 prime movers and 1,400 trailers. Swift Logistics, which was set up in 2011, aims to raise its fleet of prime movers to 400 units by 2018, which the acquisition will quickly accomplish.