This article first appeared in The Edge Financial Daily on August 20, 2019 - August 26, 2019

KUALA LUMPUR: Automotive friction materials maker Mintye Bhd said its controlling shareholder has offered to take the group private.

In a Bursa Malaysia filing yesterday, the group said Yatee & Sons Sdn Bhd had proposed a selective capital reduction (SCR) and a corresponding capital repayment of RM1.30 per Mintye share, which is a 35.42% premium to the closing price of 96 sen last Friday.

As at Aug 15, Yatee held 35.98 million shares in Mintye, representing a 59.17% stake. In its offer letter, Yatee offered to pay shareholders who hold the remaining 24.82 million shares or 40.83%, a total capital repayment of RM32.27 million.

“The proposed SCR offers entitled shareholders an opportunity to exit and realise their investments in Mintye immediately at a premium over the market price of Mintye shares, which they otherwise may have been unable to due to low trading liquidity,” the letter said.

Yatee does not intend to maintain Mintye’s listing status on Bursa.

“The privatisation of Mintye by way of the proposed SCR would provide Mintye with greater flexibility to develop its existing businesses without the regulatory restrictions and costs associated with being listed,” it said.

The proposed SCR is expected to be funded via the group’s internally generated funds, it added.

Mintye said its directors, save for Yeo Kim Swee and Yeo Kim Soon who are deemed interested in the SCR, will deliberate on the exercise offer and decide on the next course of action.