KUALA LUMPUR (Feb 7): NPC Resources Bhd’s (KL:NPC) co-founder Datuk Loo Pang Kee has formally launched his bid to privatise the Sabah-based palm oil producer

Loo, together with his vehicle Jubilant Ventures Sdn Bhd, have proposed a selective capital reduction and corresponding capital repayment to buy out the remaining shareholders of NPC Resources at RM2.82 per share, according to a letter from Loo and the vehicle received by NPC Resources on Friday.

Loo, who is NPC Resources group managing director cum CEO, controls a 56.56% stake or 66 million shares in NPC Resources.

The RM2.82 apiece price-tag values the group at a trailing price-to-earnings ratio (PER) of 10.67 times, and price-to-net asset value (P/NAV) ratio of 0.56 times.

This PER is lower than most plantation industry peers, while the P/NAV ratio is as well, according to AskEdge.

Compared to NPC Resources’ closing price of RM2.56 on Friday, the RM2.82 bid is a 10.2% premium. The counter had been on the climb since end-December last year up to a peak of RM2.90 on Jan 8, a day before Loo first announced his intentions to privatise the group.

The privatisation exercise involving the remaining 43.44% stake or 50.69 million shares Loo does not control is expected to cost RM142.96 million. Loo said this is expected to be funded via NPC Resources' internal funds as well as borrowings.

As at end-September 2024, NPC Resources had cash of RM81.31 million and total borrowings of RM394.21 million.

Given NPC Resources issued share capital of only RM120 million, the group has proposed to undertake a bonus issue of shares to non-interested shareholders to increase its share capital “up to a level which is sufficient” for the selective capital reduction.

Upon the privatisation exercise’s completion, Loo will control the same 66 million shares in NPC Resources which will represent the entire equity interest in the group.

Besides Loo and Jubilant Ventures, NPC Resources’ other substantial shareholder is Tan Sri Koh Kin Lip with a 19.4% stake.

The offer of the proposed selective capital reduction remains open for the NPC Resources' board's acceptance until March 7.

The exercise is subject to shareholders’ approval at an extraordinary general meeting to be fixed later.

At its closing price RM2.56 on Friday, NPC Resources is valued at RM307.2 million.

Read also:
NPC Resources' major shareholders in talks that could lead to privatisation — statement