MSM International Announces RM4.05 Million Divestment in Cosmos Technology: Key Details for Investors

Summary of the Transaction

MSM International Limited (“MSM”), a Singapore-incorporated company, has announced a significant strategic move: the proposed disposal of approximately 4% of its shareholding—equivalent to 10,260,026 ordinary shares—in Cosmos Technology International Berhad (“Cosmos”). The transaction will be executed through two conditional share sale agreements with two purchasers, both of whom are substantial shareholders of Cosmos. The total cash consideration for this divestment is RM4,045,980, which translates to RM0.3943 per share—a premium of approximately 12.7% above the prevailing market price of RM0.35 as of the last trading day before the agreement.

Purchasers and Their Background

• Dato’ Foong Wei Kuong: Acquiring 5,130,026 shares for RM2,023,000. Holds 17.95% equity interest in Cosmos.
• Dato’ Chong Toh Wee: Acquiring 5,130,000 shares for RM2,022,980. Currently the Managing Director of Cosmos, with a direct 36.87% and indirect 2.00% equity interest.

Importantly, both purchasers are independent of MSM; none are related to MSM’s directors or controlling shareholders. The deal contains no introducer fees.

Current Status and Future Plans

As of the announcement date, the sale to Dato’ Chong Toh Wee has already been completed. MSM now holds a reduced 4% stake (10,260,078 shares) in Cosmos. Upon completion of the remaining sale, MSM’s interest will further decrease to approximately 2% (5,130,052 shares).

About Cosmos Technology International Berhad

Cosmos is listed on the ACE Market of Bursa Malaysia and focuses on fluid control products and digital solutions for water, wastewater, and oil and gas applications. Financially, Cosmos reported net tangible assets of RM42.94 million and a net loss of RM8.83 million for the year ended April 2025. However, for the three months ended July 2025, it showed a net profit of RM0.38 million and net tangible assets of RM43.42 million.

Financial Impact on MSM International

• Gain from Disposal: MSM expects a gain of approximately RM0.76 million from the transaction.
• Use of Proceeds: The RM4.05 million (less minimal transaction costs) will be used for working capital and debt repayment.
• Net Tangible Assets (NTA) Per Share:
  • Before Disposal: RM167.84 sen
  • After Disposal: RM170.74 sen
• Earnings Per Share (EPS):
  • Before Disposal: RM42.17 sen
  • After Disposal: RM45.07 sen

The disposal will not materially affect MSM’s core businesses or business segments. It is expected to strengthen MSM’s financial position and cash flow, allowing the company to focus on its key business areas.

Regulatory and Compliance Notes

The Proposed Disposal constitutes a “disclosable transaction” under Rule 1006 of the Catalist Rules, with relative figures computed as follows:

• Net Asset Value of assets disposed compared to group NAV: 8.12%
• Aggregate consideration compared to market capitalization: 33.79%

No new directors will be appointed, and no service contracts will be entered into as a result of the transaction. None of MSM’s directors, substantial shareholders, or controlling shareholders have any interest, direct or indirect, in the Proposed Disposal.

Potential Price-Sensitive Factors for Shareholders

• Strategic refocus: MSM is divesting non-core assets to prioritize its main business lines, potentially enhancing long-term shareholder value.
• Immediate gain and cash inflow: The transaction is expected to result in a gain and improve MSM’s working capital, which could positively affect valuation.
• Premium over market price: The sale price is at a notable premium, reflecting market confidence or negotiation strength.
• Reduction in exposure to Cosmos: MSM’s stake will fall from 6% to 2% upon completion, lowering its risk profile related to Cosmos’s volatile performance.

Documents and Further Information

Copies of the share sale agreements are available for inspection at MSM’s registered office in Singapore for three months from the announcement date.

Conclusion

This transaction is strategically significant for MSM International, potentially impacting its share price and investor sentiment. The disposal achieves a gain, strengthens the company’s financial position, and signals a refocus on core operations. The premium pricing and cash inflow may be seen as positive by the market, but investors should also note the reduced exposure to Cosmos and monitor how MSM deploys the proceeds.

Disclaimer: This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. Investors should conduct their own due diligence and consult with financial advisors before making investment decisions. The information presented is based on public disclosures and may be subject to change without notice.

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