KUALA LUMPUR: Sultan Ibrahim of Johor has emerged as the single largest shareholder of REDtone International Bhd with a 20.13% stake, following conversion of his warrants and irredeemable convertible unsecured loan stocks (Iculs) to ordinary shares, and the purchase of shares from the market.

In a Bursa Malaysia filing yesterday, REDtone (fundamental: 2.3; valuation: 0.3) said Sultan Ibrahim had acquired 74.6 million shares in the integrated telecommunications solutions provider via a married deal.

According to a statement by the company, the Johor ruler had been steadily accumulating shares over the past one year. Prior to the warrants and Iculs conversion, he held a 4.8% stake in REDtone.

REDtone chairman Datuk Seri Syed Ali Syed Abbas Al Habshee welcomed the Johor Sultan as a substantial shareholder, calling it a vote of confidence in the management, the company and its future prospects.

“The group has done well, having posted three consecutive years of profit since FY12 (financial year 2012). With a major shareholder of Tuanku’s stature, REDtone’s position in the telco industry will be further strengthened,” he said in the statement.

“All four of REDtone’s key businesses are growing well. Backed by our strong core competencies, we now hope to be able to further expand our business in the state of Johor to capitalise on the robust growth there and at the same time play a significant role to assist in the creation of more employment opportunities in the state,” he added.

Following the conversion of REDtone warrants which expired on March 4, 2015, its enlarged share capital now stands at over RM66.8 million, comprising 668 million shares of 10 sen per share.

For the financial year ended May 31, 2014, REDtone posted a pre-tax profit of RM27.42 million on revenue of RM141.76 million.

REDtone shares closed 0.5 sen or 0.61% higher at 83 sen yesterday, with a market capitalisation of RM545.58 million.

This article first appeared in The Edge Financial Daily, on March 17, 2015.