Lagenda moves to exit the poultry industry

Based in Malaysia, Lagenda has announced the sale of its remaining interests in poultry production.

(designer491 | Bigstock)
(designer491 | Bigstock)

In a move that marks the company’s departure from the poultry business, Lagenda Properties Bhd has exercised its option sell its remaining stakes in six businesses in the sector.

According to The Edge Markets, the total price comes to 9.8 million ringgit (MYR; US$2.35 million). The purchaser is Datuk Ding Seng Huat. Businesses affected by the transaction are Harumi Brands Sdn Bhd, DBE Breeding Sdn Bhd, DBE Hatchery Sdn Bhd, DBE Marketing Sdn Bhd, DBE Food Processing Industries Sdn  Bhd, and DBE Gurney Chicken Sdn Bhd.

Explaining the drivers for the sale, Lagenda says it will both unlock the value and monetize its investments in the disposal companies, as well as allowing it to focus all resources in its property development business.

More on Lagenda

Formerly known as D.B.E. Gurney Resources Bhd, Lagenda Properties Bhd is a Malaysia-based investment holding company.

While it began as a poultry company in 2001, D.B.E. Gurney/Lagenda diversified into property development in early 2018. The following year, it began to divest its loss-making poultry businesses.

In the company’s latest annual report for 2019, it records that strong competition and falling margins had challenged its poultry business over a number of years. Ten years of losses for this business followed by declining revenues led the firm’s management to review the future of its activities.

Switching its business interests had a dramatic impact on the group’s fiscal performance. Following a loss of MYR27.85 million in financial year 2018, the group recorded a gross profit of MYR21.63 million for the next 12 months on revenue of MYR71.82 million.

Because of the continuing “dire straits” of its poultry business, and in the desire to end its drag on the group’s resources, immediate ex-managing director, Datuk Ding Seng Huat, agreed to acquire the poultry business of D.B.E. Gurney.

In October of 2018, the group entered into a conditional share sale agreement with Huat to dispose of 51% equity interest in those companies involved in the poultry division. This resulted in a one-off gain to the group of MYR1.36 million.

Earlier this year, Datuk Ding Seng Huat resigned as managing director of DBE Gurney Resources to focus on the firm’s chicken farming and processing activities, reported The Edge Markets.

With the initial deal completed in December of last year, Lagenda retained its option to dispose of the remaining 49% interest to the same purchaser at a predetermined price at a time of its choosing. The firm has now taken up this option.

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