KUALA LUMPUR (Nov 27): UEM Group Bhd is said to be taking cash-rich UEM Edgenta Bhd (KL:EDGENTA) private, given the latter's compressed valuation, according to sources familiar with the matter.
The asset and facility management company announced on Thursday (Nov 27) that trading in its shares has been suspended from 4.27pm pending a material announcement.
UEM Group, a wholly-owned unit of Khazanah Nasional Bhd, currently owns a 69.14% stake in UEM Edgenta, whose share price plummeted from the RM1.60-level in 2021 to a low of 62 sen a year ago.
UEM Edgenta has rebounded this year but remains far from its peak. The stock closed at 87 sen on Thursday, valuing the company at RM718.19 million. It is trading at roughly 0.5 times its net asset per share of RM1.75 as at Sept 30.
Based on the closing price, the privatisation is estimated to cost UEM Group more than RM221 million, depending on the premium it is willing to pay, to buy out the remaining shares it does not own.
UEM Edgenta’s cash and cash equivalents amounted to RM556.82 million as at Sept 30. After taking into account its total borrowings of RM397.85 million, including RM363.69 million in short-term debts, the company is in a net cash position of RM159 million, excluding lease liabilities of RM16.13 million.
Other institutional shareholders in UEM Edgenta include Urusharta Jamaah Sdn Bhd with a 5.75% stake, the Employees Provident Fund with a 2.48% stake, and the Retirement Fund (Inc) (KWAP) with a 0.76% stake.
On Wednesday, UEM Edgenda announced its worst-ever quarterly performance for the quarter ended Sept 30 due to RM96.4 million in one-off impairments, involving goodwill, non-current assets and long-outstanding receivables.
It posted a net loss of RM94.12 million versus a net profit of RM10.23 million a year earlier. Loss per share stood at 11.32 sen, compared with an earnings per share of 1.23 sen previously.
Quarterly revenue declined 2.8% to RM770.78 million from RM793.19 million a year ago, weighed down by lower contributions from the infrastructure services and healthcare solutions segments. Asset management revenue eased to RM488.89 million from RM492.64 million, while infrastructure solutions fell 6.5% to RM279.42 million.
For the cumulative nine months, UEM Edgenta booked a net loss of RM102.47 million, reversing a net profit of RM32.56 million in the same period last year. Revenue fell 3.7% to RM2.15 billion.
However, UEM Edgenta had been profitable in the last five years between 2020 and 2024.
Managing director and chief executive officer Shaiful Subhan, who was just appointed to the position late last month, described the quarter as a “necessary structural reset” as the group transitions between concession cycles, stressing that the impairments were non-cash and did not affect operational capacity or liquidity.
He pointed to continued strength in the group’s international markets, with high contract renewal rates in Singapore and Taiwan, and recent partnerships in Saudi Arabia and the UAE.
Formerly Faber Group Bhd before its name change in 2015, UEM Edgenta’s portfolio spans healthcare support services, facilities management, infrastructure maintenance, asset consultancy and technology solutions through subsidiaries such as Edgenta Healthcare Management, Edgenta (Singapore), Edgenta Facilities, Edgenta Propel, Opus Group and Edgenta NXT.