KUALA LUMPUR (Jan 7): Comintel Corp Bhd has found a new white knight to revive the company, in the form of businessman Datuk Tan Kak Seng, the sole director and shareholder of JT Conglomerate Sdn Bhd (JTC), who has emerged as the largest shareholder of Comintel after acquiring a 72.47% stake.

In a bourse filing, the Practice Note 17 (PN 17) company said it has received a notification letter from JTC, informing it that the latter had inked a conditional share sale agreement (SSA) with three vendors — namely Just Trading Sdn Bhd, Sagittarius World Trade Sdn Bhd and AMG Resources Sdn Bhd — to acquire 71.06 million shares in Comintel held by the trio that represent 50.75% of Comintel's issued share capital for RM10.66 million, cash. This is equivalent to 15 sen per Comintel share.

In addition, under Comintel's proposed regularisation plan announced on the same day, Comintel will place out 206.13 million new shares and 70 million redeemable convertible preference shares at eight sen apiece to JTC. To effect this, JTC has inked a conditional subscription agreement with Comintel.

As a result of the proposed share acquisition and subscription, JTC will hold 277.18 million Comintel shares, representing 72.47% of the company's enlarged issued shares.

Accordingly, JTC will be obliged to extend an unconditional mandatory takeover offer to acquire all remaining 105.32 million Comintel shares it does not own, at a cash consideration of 15 sen per share.

Besides the private placement and RCPS issuance, Comintel's regularisation plan also involves a share capital reduction of RM90. 96 million of its share capital to eliminate its accumulated losses of RM89.48 million as of Oct 31, 2021; and the acceptance of a construction contract worth RM188.77 million from Mightyprop Sdn Bhd.

Under the private placement, the remainder shares not taken up by JTC will be issued to Datuk Seri Godwin Tan Pei Poh and Tan Wee Dher, at 18.19 million shares each, also at eight sen apiece. Pei Poh was formerly executive director of Paragon Globe Bhd, while Wee Dher was an executive director of Global Oriental Bhd.

In total, the group is expected to raise RM25 million from the proposed private placement and RCPS, of which RM21 million will be used for its working capital and to undertake new projects, following its diversification into the construction business. 

Comintel fell into PN17 status in March 2019, when its shareholders' equity on a consolidated basis fell under RM40 million and represented less than 25% of its issued share capital. Prior to that, in January 2018, the company became an affected listed issuer after it sold off its major business, BCM Electronics Corp Sdn Bhd.

In July 2020, Comintel announced it had found a white knight in Datuk Seri Subramaniam Pillai Sankaran Pillai, the executive director of rail contractor Dhaya Maju Infrastructure (Asia) Sdn Bhd (DMIA), who would emerge as its single largest shareholder under its then regularisation plan.

Comintel was planning to place out 171.12 million new shares or 55% of its enlarged share capital to Subramaniam at 7.5 sen each to raise RM12.8 million, and set aside part of that proceeds to buy new machinery to undertake railway construction jobs, as Subramaniam, the group executive director of Dhaya Maju Infrastructure (Asia) Sdn Bhd (DMIA), was going to inject his railway infrastructure business into Comintel. DMIA also granted Comintel a subcontract job to upgrade the railway infrastructure and system under Klang Valley Double Track Phase 2, with a value of not less than RM132.36 million.

The plan also involved a share capital reduction to eliminate Comintel's accumulated losses and the disposal of certain subsidiaries for RM1 million to create a leaner company.

However, this plan was aborted in April this year, after Comintel said the plan's conditions precedent could not be met, but did not elaborate.

Shares of Comintel have been suspended from trading since May 31, 2021. The group's shares last settled at nine sen, giving it a market capitalisation of RM13 million.