KUALA LUMPUR (Nov 27): Loss-making timber firm Maxland Bhd (KL:MAXLAND), formerly known as Priceworth International Bhd, is issuing new shares representing 20% of its current share base to two companies, including the private vehicle of its non-executive chairman Datuk Abd Aziz Sheikh Fadzir, to raise funds for its new ventures into bus assembly and the development of district cooling systems for industrial buildings.
Abd Aziz is also a substantial shareholder and non-executive chairman of aviation and defence engineering solutions provider, Destini Bhd (KL:DESTINI).
The Sabah-based company is planning to issue 320.73 million shares to the investing companies at 4.55 sen apiece for a total of RM14.59 million, cash, it said in a bourse filing on Tuesday. The issuance will enlarge its share base to 1.92 billion from 1.6 billion, giving the two investing companies — Dayanine Equity Sdn Bhd and Utarasama Marine Sdn Bhd — a collective 16.67% stake in the company.
Dayanine is to subscribe for 192.44 million shares (10% of the enlarged share base). Dayanine is wholly-owned by Abd Aziz, who was made Maxland's non-executive chairman last year.
Utarasama Marine will take up 128.29 million shares (6.67%). It is 70%-owned by Datuk Rosli Rashid, 20% by former Destini chairman Datuk Rozabil @ Rozamujib Abdul Rahman, and 10% by Ruhaizan Rashid. Rosli is a director of Gold Bridge Engineering & Construction Bhd. He is also part of the management of Datasonic Group Bhd's (KL:DSONIC) wholly-owned subsidiary, Datasonic Corp Sdn Bhd.
Maxland’s single largest shareholder is Exempt Authorised Nominee for Kenanga Investors Bhd, with 24.58%, which means it is holding the shares for its client. Maxland managing director Datuk Lim Nyuk Sang @ Freddy Lim is its second largest shareholder with 20.83%. After the placement, Kenanga Investors' stake will be diluted to 20.49%, while Lim’s will drop to 17.35%.
Maxland has earmarked RM8 million of the proceeds to fund opportunities in bus assembly and RM6.59 million for a design-build-operate-maintain district cooling system project in Kedah.
The company had in June this year acquired System Enhancement Resources & Technologies Sdn Bhd (SERT) for RM1. Subsequently, SERT, together with other automobile companies, had accepted a contract from a “state-owned company” to supply diesel buses for RM176.82 million. It also involves the provision of maintenance support and spare parts for the diesel buses for 13 months, it said.
This project, it said, is estimated to cost RM150 million. It expects to fund the project via proceeds from the share placement and bank borrowings.
Meanwhile, Maxland said its wholly-owned Maxland Energy Sdn Bhd is negotiating for a potential project to design, build, operate and maintain the district cooling system for industrial buildings in Kedah. Maxland Energy is also in talks to lease a plot of land in Kedah to set up a district cooling plant, it said.
The subscription exercise is expected to be completed by the first quarter of 2025.
Prior to this proposed subscription, Maxland undertook a private placement exercise of up to 10% of its shares in September last year to raise RM11.37 million to fund its timber business.
Shares in Maxland ended unchanged at six sen on Tuesday, valuing the company at RM96.22 million. The stock has dropped three sen or over 33% from the start of the year.