PRG Holdings Berhad Annual Report 2019

ANNUAL REPORT 2019 121 NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2019 cont’d 10. INVESTMENTS IN SUBSIDIARIES (continued) (d) Disposal of 2.79% equity interest in Furniweb Holdings Limited (“FHL”) On 16 January 2019, the Company obtained approval from its shareholders to dispose up to 60,480,000 ordinary shares, representing up to 12% equity interest in FHL, to buyers to be identified and at prices to be determined later in the open market and/or via direct business transactions, in cash (“Disposal Mandate”). The Disposal Mandate from its shareholders is valid for a period of 12 months from 16 January 2019. On 30 May 2019, the Company has disposed 13,000,000 ordinary shares of HKD0.10 each (“Sale Shares”) via direct business transactions, representing 2.58% equity interest in FHL at HKD2.00 (equivalent to RM1.07) per Sale Share for a total cash consideration of HKD26,000,000 (equivalent to RM13,907,000). On 4 June 2019, the Company has disposed 1,052,000 ordinary shares of HKD0.10 each (“Sale Shares”) in the open market, representing 0.21% equity interest in FHL at HKD2.85 (equivalent to RM1.52) per Sale Share for a total cash consideration of HKD2,998,200 (equivalent to RM1,598,000). Upon completion of the disposal, the Company’s shareholdings in FHL is reduced from 317,520,000 ordinary shares representing 63.00% to 303,468,000 ordinary shares representing 60.21%. The disposal of the 2.79% equity interest in FHL resulted in an increase in the Company’s profit for the financial year by RM12,916,000. The Company’s gain on disposal of RM12,916,000 is reversed at the Group level as changes in a parent’s interest in a subsidiary that do not result in a loss of control are accounted for as equity transaction (i.e. transactions with owners in their capacity as owners). The Disposal Mandate had expired on 15 January 2020. (e) Dilution of 6.02% equity interest in Furniweb Holdings Limited (“FHL”) On 28 June 2019, FHL acquired 50,000 ordinary shares representing 100% equity interest in MHGL from Triumph Star Global Limited for a consideration of HKD140,000,000 by way of 56,000,000 Consideration Shares of FHL at HKD2.50 per Consideration Share. Upon completion of the acquisition, total ordinary shares issued of FHL is increased from 504,000,000 to 560,000,000. The Company’s shareholdings of 303,468,000 ordinary shares in FHL is diluted from 60.21% to 54.19% immediately after the completion of the acquisition.