Lotus Circular Exits Leather Retail With RM38mil Sale of Miroza Stake

Lotus Circular Bhd is exiting the leather retail business, agreeing to sell its remaining 55% stake in Miroza Leather (M) Sdn Bhd to Trend Navigator Sdn Bhd for RM38 million cash — even though Miroza has been the group’s single largest contributor to both profit and revenue.

In a 17 July 2026 filing with Bursa Malaysia, the waste recycling and (until now) leather retail group said its wholly owned subsidiary had entered a conditional share sale agreement to dispose of 4.73 million Miroza shares. Miroza will cease to be a subsidiary once the deal completes.

A profitable business sold at a loss

The sale price of RM38mil sits at the higher end of an independent fair-value range of RM33.34mil to RM40.11mil, appraised by Sierac Corporate Advisers Sdn Bhd. Even so, the disposal is expected to produce a pro forma loss of RM15.39mil for Lotus Circular, based on its FY2025 audited accounts — a loss-per-share impact of about 5.11 sen on the group’s 300.89 million issued shares.

The business being sold is not a laggard: Miroza’s retail operations contributed 83% of the group’s RM10.2mil net profit and 72% of its RM153.5mil revenue for the nine months ended 31 March 2026. Miroza runs five retail stores and 539 consignment counters nationwide, carrying licensed brands including Pierre Cardin, Alain Delon, Crocodile and Ducati.

What’s being kept — recycling — is currently the smaller earner, accounting for about 30% of group profit and revenue. Lotus Circular said Miroza’s profitability has nonetheless declined sharply, with profit after tax falling from RM13.17mil in FY2023 to RM3.68mil in FY2025 amid weaker consumer spending and intense retail competition. The board called it a timely opportunity to unlock the value of the investment and redirect resources toward recycling, which it views as offering stronger growth potential and scalability.

The buyer, and where the money goes

Trend Navigator Sdn Bhd is owned by two individuals, Siow Sea Nen and Chen Mui Yong, with Siow holding a 99% stake; Trend Navigator had already acquired a 45% stake in Miroza from Lotus Circular back in June 2023. Of the RM38mil proceeds, the bulk — reported as RM37.38mil by The Star and RM32.38mil plus RM5mil to trade creditors by The Malaysian Reserve — is earmarked for operating expenses and settling trade creditors, with RM620,000 covering disposal-related costs.

KAF Investment Bank is advising on the transaction, which is classified as a major transaction requiring shareholder approval at an EGM. Completion is targeted for the first quarter of 2027. Shares of Lotus Circular fell three sen, or 9.5%, to close at 28.5 sen on the day the deal was announced, valuing the group at RM85.8mil.

Behind the divestment: the recycling business Lotus Circular is betting on

Lotus Circular — renamed from MESB Berhad in December 2024 — has been building out its recycling arm through wholly owned subsidiaries N.U. Recycle, Waier Trading, Formidex and MESB Resources, and in December 2024 agreed to acquire two further recycling companies, Earthwise Resources and Expert Resource Management, for a combined RM100mil from entities controlled by its own chairman and largest shareholder, Datuk Wong Sak Kuan.

Per a Bursa circular to shareholders dated 31 October 2025, two of the group’s recycling subsidiaries operate from factories in Selangor — MESB Resources from a roughly 59,650 sq ft site in Bandar Bukit Puchong, and N.U. Recycle from a roughly 87,578 sq ft site in Shah Alam’s Section 32 — both rented from Sing Foong Niap Sdn Bhd, a company controlled by Datuk Wong himself, at RM700,000 a year apiece. Both leases are disclosed as recurrent related-party transactions.