KUALA LUMPUR (Sept 12): Scientex Bhd (KL:SCIENTX), the main shareholder of Scientex Packaging (Ayer Keroh) Bhd (KL:SCIPACK), has proposed a selective capital reduction and repayment plan. Under this plan, all SciPack shareholders except Scientex will get RM1.50 cash per share, totalling about RM147.82 million.
The shares of these shareholders will be cancelled, giving Scientex full ownership of SciPack. The company will also cancel 550,100 treasury shares after the exercise, according to a bourse filing on Friday. This will make SciPack a wholly owned subsidiary of Scientex, increasing its control over the business.
Scientex had previously attempted to take full control of SciPack (formerly Daibochi) in 2021, but only raised its stake to 71.89% — short of the 90% needed to delist the company.
The attempt was blocked by two substantial shareholders, Apollo Asia Fund Ltd and Samarang Ucits-Samarang Asian Prosperity, which held out for a higher offer. The two funds currently hold a combined 15.73% stake.
Scientex first acquired a 42.48% stake in Daibochi for RM222.5 million in February 2019.
Scientex, in explaining the rationale for its latest privatisation attempt, said the move will enable the group to consolidate and streamline its packaging manufacturing operations under a single entity, allowing for more efficient resource allocation and management oversight.
In addition, the exercise offers minority shareholders an opportunity to realise their investment in SciPack at a premium over the prevailing market price, without being exposed to the inherent risks of the industry and market fluctuations.
The proposed privatisation is also expected to eliminate listing-related expenses and compliance costs, enabling Scientex to manage SciPack’s operations with greater flexibility, it added.
The selective capital reduction will be funded through internally-generated funds and/or external borrowings.
Scientex said it does not intend to maintain SciPack’s listing status on the Main Market and will not take steps to restore the public shareholding spread if it falls below 25%.
The exercise is subject to approvals from the Securities Commission Malaysia, Bursa Malaysia and the High Court, as well as the consent of SciPack’s entitled shareholders at an upcoming extraordinary general meeting, with at least 75% voting in favour and not more than 10% opposing.
At Friday’s noon break, shares of Scientex settled one sen or 0.32% higher at RM3.10, giving the group a market capitalisation of RM4.82 billion. SciPack was last traded at RM1.40, valuing it at RM491.64 million.