KUALA LUMPUR (Aug 27): Kwantas Corp Bhd said the oil palm plantation firm had yesterday received a letter from its major shareholder Kwan Ngen Wah requesting Kwantas to undertake a selective capital reduction and repayment (SCR) at RM1.65 a share.

Ngen Wah said in his letter to Kwantas directors that he wrote the letter to submit his proposal to privatise Kwantas via the SCR. The letter was attached to Kwantas' Bursa Malaysia filing yesterday.

In the filing, Kwantas said its board of directors, save for the interested directors namely Ngen Wah, Datuk Chong Kan Hiung, Kwan Jin Nget and Kwan Min Nyet, will deliberate on the SCR and decide on the next course of action.

"Accordingly, a further announcement will be made in due course after the board’s deliberation.

"Should the board (save for the interested directors) resolve to table the proposed SCR to the shareholders of Kwantas (save for Ngen Wah and persons acting in concert with him) for their consideration and approval, and subject to the fulfilment of all the conditions of the proposed SCR, the proposed SCR will involve Kwantas undertaking a selective capital reduction and a corresponding capital repayment of a cash amount of RM1.65 per ordinary share in Kwantas held by all the shareholders of Kwantas (other than Ngen Wah and the Estate of Kwan Ngen Chung), whose names appear in the record of depositors of Kwantas as at the close of business on an entitlement date to be determined and announced later by the board," Kwantas said.

At RM1.65, Kwantas is valued at RM514.27 million based on the company's 311.68 million issued shares.

Kwantas' share trade was suspended yesterday (Aug 26) in conjunction with the SCR announcement.

Prior to the suspension, Kwantas' last closing share price was 55.5 sen, which gave the company a market value of RM172.98 million.

Kwantas' latest-reported net assets per share stood at RM3.56, according to its Bursa filing dated May 28, 2020.

Yesterday (Aug 26), Ngen Wah wrote in the letter that the SCR offers a good opportunity for entitled shareholders to exit and realise their holdings in Kwantas at a premium over the market price of Kwantas shares.

"I do not intend to maintain the listing status of Kwantas on the Main Market of Bursa following the completion (of the SCR)," said Ngen Wah, who owns a 29.9% stake in Kwantas.

Including stakes held by persons acting in concert with Ngen Wah, their collective stake in Kwantas is more than 60%, according to the letter.

Today, Kwantas shares rose on the proposed SCR when trading resumed.

At 11:01am, Kwantas' share price climbed 30 sen or 54.05% to 85.5 sen with some two million shares traded.