The Leveraged Buy-Out of ICI Malaysiaby Professor Ian H. Giddy
New York University
On July 7, 1994 discussions were initiated for the proposed sale of 50.1% equity interest in CCM by ICI (Malaysia) to three executive directors of CCM for RM 206.00 million.
On November 18, 1994 the management buy-out was completed.
The buy-out was financed primarily by bank loans that served as bridge financing. The bridge financing was repaid out of the proceeds of divestitures of non-core businesses, and from a RM 150 million bond issue in 1995.
BackgroundThe Company (CCM) was incorporated to manufacture chlor-alkali products and high grade compound fertilizers. A restructuring of the Company was substantially and successfully completed in June 1987, resulting in the Company becoming an investment holding and management company with its subsidiaries engaged in the manufacture and marketing of agrochemicals, fertilizers, chlor-alkali products and paints, and in the marketing of a wide range of industrial chemicals and pharmaceuticals.
At the end of September 1994, the Company had divested its entire paints business and the three executive directors of the Company entered into an agreement with the then majority shareholder, ICI (Malaysia) Holdings for a Management Buy-Out. In 1995, the Company ventured into the pharmaceutical business in a big way via the acquisitions of the UPHA group of companies and CCM Pharma. It has since succeeded in forming JVs with overseas partners to set up and operate healthcare facilities and set up retail pharmaceutical outlets in the country.
In 1997, the Company disposed of a 9% stake in CCM Bioscience Bhd in conjunction with the offer for sale and public listing of that company on the Second Board of KLSE. The Company now holds a 42.9% interest in CCM Bioscience.The Company has also ventured into the hospital business with the construction of two hospitals, one in Shah Alam and the other in Seremban.
<>Principal Activities Company - management and investment holding. Subsidiaries -manufacture and marketing of agrochemicals, fertilizers, chlor-alkali products, pharmaceutical and healthcare products; marketing of a wide range of industrial chemicals; operating healthcare facilities.
09 August 1999Unaudited half year results