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KUALA LUMPUR: LTKM Bhd
fell over 12% in early trade on Friday after the group terminated its reverse takeover deal and divestment of its egg business.
The chicken egg producer slid 18 sen, or 12.41% to RM1.27 at 10.06 am, making it the top losers on Bursa Malaysia. In the past month, the counter has fallen 21%.
In April 2022, LTKM put forward a series of proposals to divest its existing business to its major shareholder and venture into the provision of electronic manufacturing services (EMS) via the acquisition of Local Assembly Sdn Bhd.
LTKM also proposed to acquire 100% equity interest in Local Assembly for RM336mil, which will be satisfied via RM100mil cash and the issuance of 393.33 million new LTKM shares at an issue price of 60 sen apiece.
In a Bursa filing, LTKM said the group and vendors had mutually terminated the proposed acquisition given that both parties have experienced contrasting financial performance subsequent to the execution of the latest supplemental letter agreement dated May 10, 2023.
“Although its projects are still ongoing, Local Assembly is facing unforeseen delays in their implementation by its major customers, while LTKM has returned to profitability from the egg subsidy by the Government since the inception of the proposals.
“As such, both parties concluded that it is mutually beneficial to terminate the proposed acquisition and to respectively pursue any future strategies of their own,” it said.
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