KUALA LUMPUR (Sept 14): Chemicals industry player Hexza Corp Bhd (KL:HEXZA) is seeking an exemption for the Foong family from having to make a mandatory takeover offer (MGO).

In a filing with Bursa Malaysia, Hexza said the exemption is needed because the shareholders plan to reinvest their final dividend in new Hexza shares, which could push their combined stake above the 33% threshold that triggers an MGO.

The Foong family collectively hold 67.72 million shares, or 32.94%, including 30.62% held by Summit Holdings. The patriarch of the family Datuk Dr Foong Weng Cheong is a shareholder of Hexza, while his son Foong Leon Chiew is the executive chairman of the company.

Hexza proposed a final dividend of 7.5 sen per share for the financial year ended June 30, 2026. The full dividend will be eligible for reinvestment under its dividend reinvestment plan (DRP), subject to approval.

If the major shareholders reinvest their full dividend entitlement while other shareholders take their dividends in cash, their combined stake could rise to 34.90%, based on an illustrative issue price of 82 sen. At the maximum scenario of 66 sen per share, their stake could increase to 35.36%.

The shareholders have said they do not intend to make an MGO for the remaining Hexza shares. As a result, Hexza will seek an exemption from the Securities Commission Malaysia, subject to approval from non-interested shareholders at an extraordinary general meeting.

The interested shareholders and directors will not vote on the exemption. Independent adviser cfSolutions Sdn Bhd has been appointed to advise the non-interested shareholders.

Bursa Malaysia has approved the listing of up to 20.5 million new shares under the second DRP, subject to certain conditions. The final issue price will be determined later based on Hexza’s five-day volume-weighted average market price before the pricing date, less the 7.5 sen dividend and a discount of up to 10%.

Hexza said the proposed exemption will not affect its share capital, net assets, gearing, earnings or earnings per share. However, the DRP could dilute earnings per share depending on the number of shareholders who choose to reinvest their dividends.

The exemption is expected to be completed by the first quarter of 2027, subject to the necessary approvals.

The company, which manufactures and distributes synthetic resins, industrial glues and urea-formaldehyde, reported a more than six-fold increase in net profit to RM3 million for the financial year ended June 30, 2026. This was driven by a five-fold jump in profit from its resins segment and a return to profitability in its ethanol segment. Revenue rose 25.4% to RM74.35 million. 

Hexza’s shares were unchanged on Monday at RM1.09, valuing the company at RM224.10 million.