Oriental Interest expands income stream with RM280mil acquisitions

KUALA LUMPUR: Oriental Interest Bhd (OIB) has proposed to acquire the entire equity interest in Chin Hin (Jitra) Sdn Bhd (CHJSB) and CHJ Motor Holdings Sdn Bhd (CMHSB) for RM280mil as it aims to expand its business portfolio.

The vendor is LLSB 1980 Holdings Sdn Bhd, which is also a substantial shareholder of IOB with a 5.08% direct stake. It also forms part of the same ownership group as OIB's controlling shareholder, LK Labuan Foundation, which holds an aggregate indirect interest of 66.24% in the group.

The property developer said the proposed acquisitions will provide it with additional income streams, broaden its earnings base and enhancing its existing business segments. 

Additionally, they will establish a new platform for future growth, especially in the financing industry.

CHJSB is a provider of motor vehicle hire purchase financing and money lending services while CMHSB is the retail arm, which holds 11 subsidiaries engaged in the retail of motorcycles and spare parts, repairs and insurance agency services.

According to OIB, the aggregate revenue of the companies rose 5.1% to RM263.82mil in FY25 from RM250.91mil in FY24, while aggregate profit after taxation (PAT) rose 79.6% to RM19.35mil from RM10.78mil in the previous year.

OIB will satisfy the purchase consideration in entirely securities: RM100mil will be settled via the issuance of 76.92 million new shares at RM1.30 each while the balance RM180mil will be settled through the issuance of 180 million redeemable non-convertible preference shares (RPS) at RM1 each.

The RPS have a tenure of seven years and a cumulative coupon of 4% per annum.

As a related party transaction, the proposed acquisitions will require the approval of non-interested shareholders at an extraordinary general meeting to be convened.

Subject to the approval and the fulfilment of all relevant conditions precedent, the proposed acquisitions are expected to be completed by the fourth quarter of 2026.