Update Scientex signs share sale agreement with Japan's Futamura Chemical

by **Cals** Thu 25 Sep 2014, 01:21

Update Scientex signs share sale agreement with Japan's Futamura Chemical

Business & Markets 2014

Written by Shalini Kumar of theedgemalaysia.com

Wednesday, 24 September 2014 16:27

KUALA LUMPUR (Sept 24): Scientex Packaging Film Sdn Bhd, a wholly-owned unit of Scientex Bhd, has signed a share sale agreement with Japan's Futamura Chemical Co Ltd (FCC) for the latter to acquire a 5% stake in Scientex Great wall Sdn Bhd, another wholly-owned subsidiary of Scientex.
Speaking during his presentation at the signing ceremony today, Scientex managing director Lim Peng Jin said Scientex Great Wall Sdn Bhd (SGW) would issue 10 million new shares to increase its share capital to 100 million shares.
SGW is a wholly-owned subsidiary of Scientex Packaging Film and is involved in the manufacturing of blown film, biaxially-oriented polypropylene (BOPP) film and packaging products.
Lim said Scientex would then make a capital injection of RM40 million into SGW to increase its equity stake to 95% in the expanded share base, while, FCC would similarly inject RM40 million into SGW to acquire five million shares, or a 5% stake, in the subsidiary.
Following the share sale, SGW will become a 95:5 joint venture company between Scientex and FCC.
"Futamura's participation via the equity stake in SGW reflects the long term perspective adopted by both parties to jointly grow our consumer packaging business in Asia Pacific," said Lim.
"We are certainly exploring further collaborations beyond base film into other aspects, such as barrier film capability and other functional films," he added.
FCC is entitled to purchase an equity interest of up to 20% in SGW over the next five years.
The share sale is expected to be completed by the end of October.
To recap, in an announcement in August, Scientex said that Futamura and Scientex Packaging Film had inked a strategic alliance agreement to build a “world class” BOPP film manufacturing plant in Malaysia and to develop and grow the consumer packaging markets.