Kaiserkorp is a US-based manufacturing operation for the world-famous King Koil brand of mattresses and bedding. Currently, KPS holds a 60% ownership stake in Kaiserkorp.

In a filing with Bursa Malaysia, the company said the proposed disposal would involve Bold Approach divesting its 44.62 million ordinary shares in Kaiserkorp, representing its 50% equity interest in the company to AI Dream.

It said that the exercise would also comprise the divestment by Yeoh, who is a director and shareholder of Kaiserkorp, selling 26.77 million ordinary shares in the company, representing his 30% equity interest in Kaiserkorp to AI Dream.

“Following the completion of the proposed divestment, Kaiserkorp will cease to be a subsidiary of Bold Approach and Bold Approach will be holding a 10% equity interest in Kaiserkorp,” KPS said.

The group said the gross proceeds from the proposed disposal would be used mainly for repayment of borrowings amounting to RM188.68 million within 12 months.

“The board believes that the proposed divestment will provide an opportunity for the group to monetise its investment in Kaiserkorp but continue to benefit from the financial performance of the Kaiserkorp group with minimal exposure to the businesses and operations risk of the Kaiserkorp group through Bold Approach’s 10% equity interest in Kaiserkorp,” it added.

Furthermore, the proposed sale would allow the KPS group to recognise an estimated gain of about RM117.43 million and generate a return of investment of 272.19%, as well as raise immediate funds of approximately RM265.48 million and channel them towards the proposed utilisation.

Upon completion of the proposed divestment, Kaiserkorp would cease to be a subsidiary of Bold Approach, and accordingly, KPS would not be consolidating the results and financial positions of the Kaiserkorp group, it added.

“Hence, the KPS Group shall only recognise the contribution from the Kaiserkorp group through the 10% equity interest to be held by Bold Approach after the completion of the proposed divestment,” the group said.

The proposed transaction is expected to be completed by the first quarter of 2024.

At the close of trading, KPS’s share price was down by 2.5 sen or 2.91% at 84 sen, giving it a market capitalisation of RM448.7 million.