PETALING JAYA: Cycle & Carriage Bintang Bhd is disposing its 49% stake in Mercedes-Benz Malaysia Sdn Bhd (MBM) for RM66 million, following Daimler AG’s (DAG) decision to exercise its call option.
In a filing with Bursa Malaysia, Cycle & Carriage said it received a notice from DAG that it is exercising its call option over 66 million shares of MBM, currently held by Cycle & Carriage.
Cycle & Carriage is required to sell the shares to DAG, after which it will cease to hold shares in MBM and will no longer be entitled to the annual dividend of about RM11.2 million.
The company said the disposal will not directly impact any of its trading operations, trading performance or its support of customers and it will continue to be a Mercedes-Benz dealer group in Malaysia with 13 sales and after-sales facilities across Malaysia to serve Mercedes-Benz customers.
“Cycle & Carriage would like to assure all our customers that the recent decision by DAG to exercise their call option will not impact our commitment or ability to continue delivering exceptional experiences to our customers in Malaysia,” said Cycle & Carriage CEO Wilfrid Foo.
“All dealerships will continue to provide you with quality sales and after-sales services in accordance with the strictest Mercedes-Benz quality standards supported by MBM,” he said in a statement.
The call option is pursuant to the agreement on the restructuring of the distribution of Mercedes-Benz products in Malaysia dated Dec 9, 2002. The disposal is expected to take place on Nov 30, 2019, which is the expiry of 12 months from the date of the notice from DAG.
Cycle & Carriage is not expected to have any gain or loss from the proposed disposal. Its original cost of investment in MBM shares was RM66 million, with the date of investment being Jan 10, 2003.
