KUALA LUMPUR (Nov 28): UEM Group Bhd, a wholly owned subsidiary of Khazanah Nasional Bhd, has proposed to privatise UEM Edgenta Bhd (KL:EDGENTA) through a selective capital reduction (SCR) and repayment exercise, offering RM1.10 per share.
UEM Group currently owns 69.14% of UEM Edgenta.
Trading in UEM Edgenta shares was suspended at 4.27pm on Thursday (Nov 27) before the announcement, with the stock last trading at 87 sen.
The move confirms an earlier report by The Edge that UEM Group intended to take the cash-rich company private due to its low valuation. It last traded at roughly 0.5 times its net asset per share of RM1.75 as at Sept 30.
The RM1.10 offer price for the remaining 257 million shares (30.86% stake) represents a 26.4% premium to the last traded price of 87 sen and a 38.5% premium to the six-month volume-weighted average price of 79 sen. The total payout under the SCR is RM282 million.
In its filing with the bourse, UEM Group said that UEM Edgenta was badly affected by the Covid-19 pandemic, mainly due to reduced infrastructure work during movement control orders. Although the company has stabilised since then, its performance remains weaker, with higher costs and regulatory changes weighing on profits and dividends.
UEM Group said taking the company private would help improve its finances and give it greater flexibility in strategy, resource allocation and managing its businesses.
UEM Edgenta's board have until Jan 9, 2026 to decide on the SCR. If approved, the proposal will go to shareholders for approval. It needs at least 75% support from voters, and fewer than 10% voting against it, for the resolution to pass.
On Wednesday, UEM Edgenta reported its worst-ever quarterly results, posting a net loss of RM96.12 million for the third quarter ended Sept 30. The loss was mainly caused by RM96.4 million in one-off impairments on goodwill, non-current assets and long-outstanding receivables.
The company recorded a loss per share of 11.32 sen, compared with earnings per share of 1.23 sen a year earlier.
As of Sept 30, UEM Edgenta had RM556.82 million in cash and cash equivalents against RM397.85 million in borrowings, putting it in a net cash position of RM159 million (excluding RM16.13 million in lease liabilities).
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 Kumpulan Wang Persaraan (Diperbadankan) (KWAP) with a 0.76% stake.