KUALA LUMPUR (Oct 7): Based on corporate announcements and news flow today, companies in focus tomorrow (Thursday, Oct 8) could include: AirAsia, KNM, Perisai Petroleum, WCT, Anzo, CBIP, Benalec, VSolar, TH Heavy, China Automobile and GPA.
AirAsia Bhd has denied any knowledge of plans to take the budget airline private by its founders.
In response to news reports that the airline's co-founders Tan Sri Tony Fernandes and Datuk Kamarudin Meranun may take it private, AirAsia told Bursa Malaysia that it has no knowledge of a privatisation.
However, it confirmed it is in discussion with certain bankers to partially finance the buy-back of its shares.
Reuters reported yesterday (Oct 6) that founders of the airline were sounding out investors to take the airline private in a management-led buyout, citing people familiar with the matter.
AirAsia said the company was aware of the privatisation rumour since it surfaced in August this year, with the airline's shares being actively traded.
However, it noted this was prior to the airline announcing its proposal for a share buy-back of up to 10% on Sept 18.
KNM Process Systems Sdn Bhd (KNMPS), a wholly-owned subsidiary of KNM Group Bhd, has clinched a £88 million (approximately RM581 million) contract for the construction and commissioning of a waste-to-energy facility in Croydon, United Kingdom (UK).
In a filing with Bursa Malaysia, KNM Group said KNMPS accepted a letter of award from UK-based Drenl Ltd to undertake the engineering, procurement, construction and commissioning (EPCC) of a waste-to-energy facility at Beddington Lane, Croydon, UK on Sept 6.
KNMPS has also been awarded the operation and maintenance (O&M) of the said facility, subject to the finalisation of the terms and conditions.
The EPCC contract duration is approximately 27 months, commencing after receiving notice to proceed from Drenl and is expected to contribute positively to KNM Group's earnings for the financial years ending Dec 31, 2016, 2017 and 2018.
Perisai Petroleum Teknologi Bhd plans to undertake a private placement to raise up to RM37 million, assuming an indicative issue price of 31 sen per placement share, to partially repay its bank borrowings and/or capital investment for jack-up drilling rigs and mobile offshore production unit (MOPU).
In a filing with Bursa Malaysia, Perisai said the proposed private placement will involve the issuance of up to 119.27 million shares, or 10% of the existing issued share capital of the company, at an issue price to be determined and announced later.
The oil and gas service provider said it expects to allocate RM25 million of the proceeds for partial repayment of bank borrowings and/or capital investment, RM11.7 million for working capital, and the remaining RM300,000 to offset the expenses from the corporate exercise.
It said the placement shares shall be priced at not more than 10% discount of its five-day weighted average market price, but not lower than its par value of 10 sen each.
Perisai expects the proposed private placement to be completed by the second quarter of 2016.
Malaysian Rating Corp Bhd (MARC) has affirmed its long-term ratings on WCT Holdings Bhd's debt and sukuk issuances, but revised its outlook on the company's financial issuances to 'negative', from 'stable', due to weakening credit metrics, in particular its leverage ratios.
In a statement, MARC said it has affirmed its long-term ratings on: WCT's RM600 million five-year fixed rate serial bonds (due December 2015) at AA negative, RM1 billion 15-year medium term notes (MTN) programme (due April 2028) at AA negative, and RM1.5 billion 15-year sukuk murabahah (due October 2029) at AA negative.
The affirmed ratings incorporate WCT's longstanding construction track record, its improved order book and its moderately diversified earnings profile from property development and property investment activities, said MARC.
However, the ratings agency noted as at June 30, 2015 (first half of financial year 2015 or 1HFY15), WCT's gross debt-to-equity (DE) ratio rose to 1.05 times, from 0.85 times as at end-financial year 2013 (FY13).
It said WCT's gross DE could potentially increase to 1.21 times, due to capital commitments, despite the recent rights issue that raised RM107.9 million.
It also noted that the increased borrowings, which stood at RM2.4 billion as at end-1HFY2015 (up from RM1.9 billion at end-FY13), have largely gone to fund land acquisitions.
"The potentially long gestation period to develop some of these land parcels to generate positive cash flows remains a key concern, particularly in view of weakening property market sentiments," it added.
Harvest Court Construction Sdn Bhd (HCCSB), a wholly-owned unit of Anzo Holdings Bhd, has been awarded a RM39.4 million job to complete works at a residential project in Gombak.
In a filing with Bursa Malaysia, Anzo, formerly Harvest Court Industries Bhd, said HCCSB has received the letter of award from KL Northgate Sdn Bhd today, to be the main contractor to complete the remainder of the construction works on the 284-unit high cost condominium, with a five-storey podium carpark.
The contract appears to be a related party transaction, as major shareholder and managing director Datuk Chai Woon Chet is also a director and shareholder of KL Northgate.
Anzo said the contract from KL Northgate is expected to contribute positively to its earnings per share, net assets per share and gearing of the Anzo Group.
CB Industrial Product Holding Bhd (CBIP) has declared a second interim dividend of 3 sen or 6% per share of 50 sen each for the financial year ending Dec 31, 2015(FY15).
The entitlement and payment dates will be announced in due course, said the group in its filing with Bursa Malaysia.
The announcement brings its dividend for FY15, to date to 6 sen.
Benalec Holdings Bhd declared a final dividend of 0.3 sen for each ordinary share of 25 sen for financial year ended June 30, 2015 (FY15).
In a filing with Bursa Malaysia, Benalec said the final single-tier dividend will be paid on Feb 15, 2016.
The company said the entitlement date for the dividend is Jan 20, 2016.
VSolar Group Bhd is seeking an additional four-month extension, up to March 28, 2016, for its proposed rights issue with warrants from Bursa Malaysia.
In a filing with Bursa Malaysia, the software solution distributor said it has submitted its application for four months, up to March 28, 2016, to complete the proposed exercise.
The extension was to comply with the Paragraph 6.60(1) of the ACE Market Listing Requirements, which states that a listed issuer must complete the implementation of a proposal relating to an issuance of securities, within six months from the date of approval by Bursa Securities.
The corporate exercise was first announced by the group on Dec 8 last year, with the intention to raise up to RM115.31 million from the proposal.
The proceeds raised from the exercise will be utilised for the construction of a solar photovoltaic plant for RM107.7 million, while some RM6.76 million will be set aside for other working capital.
VSolar submitted the listing application to Bursa in relation to the proposals, on Jan 9 this year. The regulator gave its greenlight on May 29.
TH Heavy Engineering Bhd (THHE) has appointed Datuk Johan Abdullah, the deputy managing director and chief executive officer of Lembaga Tabung Haji, as its chairman, effective today.
Johan, 58, was appointed to replace Datuk Ghazali Awang, 68, who has been redesignated as the group's non-independent and non-executive director, according to separate THHE filings to Bursa Malaysia.
Besides his positions in Tabung Haji, Johan holds directorship in BIMB Holdings Bhd, Syarikat Takaful Malaysia Bhd and TH Plantations Bhd.
Meanwhile, Ghazali has also been appointed a member of the group's audit committee to replace Datuk Seri Mohamad Norza Zakaria, who had resigned from the committee.
Separately, THHE said Datuk Seri Mohamad Norza Zakaria, 49, has also resigned from his position as the group's independent and non-executive director, due to "other work commitment".
China Automobile Parts Holdings Ltd (CAP) is partnering Australia-listed Siburan Resources Ltd, to showcase its products in Australia.
It inked an agreement to establish a 50:50 joint venture (JV) company with Siburan today, to “promote, sell, market, and distribute CAP products used in automobiles for the transporting of goods in Australia and regions outside China”, according to its filing with Bursa Malaysia today.
The China-based automobile parts manufacturer said the proposed JV is a related party transaction, as SUB is an indirect major shareholder of CAP.
Under the agreement, the new JV company will be formed under the proposed name of Siburan Engineering Pty Ltd (SEPL), with an initial issued and paid-up capital of AUD$50,000 (RM155,570); its eventual issued and paid-up capital shall be US$100,000 (RM311,140).
The proposed investment in SEPL of AUD$50,000 will be financed through internally-generated funds. The proposed JV is not subject to the approval of CAP’s shareholders or government authorities.
GP Autobat Sdn Bhd, a wholly-owned subsidiary of GPA Holdings Bhd, is being sued by Battery Solutions Sdn Bhd over an alleged breach of contracts involving the purchase of battery grid panels.
In a filing with Bursa Malaysia, GPA Holdings said GP Autobat was served with a writ of summons and statement of claims in September this year, over three grid casting contracts signed with Battery Solutions on Sept 14, 2009; Feb 28, 2011; and March 26, 2011.
Battery Solutions had alleged the then managing director of GPA Holdings had committed the company to purchase a fixed quantity of grid panels on a monthly basis from it, through separate contracts.
According to GPA Holdings, the statement of claim further alleged GP Autobat had breached the contract by failing and/or refusing to purchase the requisite amount of battery grid panels from Battery Solutions, which resulted in the latter suffering damages and losses.
Battery Solutions is seeking RM1.21 million in damages with an interest rate of 5% per annum, on the sum of RM1.21 million from the date of termination of the contracts by GPA Holdings until the date of full and final settlement — general damages, costs and other relief that the court deems fit.
GP Autobat is principally involved in the manufacturing and sale of automotive batteries and components.
GPA Holdings said its solicitor is of the opinion the above-mentioned contracts can be legally challenged.
(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)