Prior to the rights issuance, KCB intends to undergo a capital reduction which will see a reduction of its existing shares’ par value of 50 sen to 10 sen per share, a move which will wipe out on its accumulated losses of rm475.3 million.
KCB also entered into an agreement with Chen to settle rm322.2 million of debt via an issuance of new shares at an issue price of 11 sen per share. In Aug 2012, Chen who owns a 43.9% stake in KCB, had made a rm100 million advance to the company to help pare down its borrowings. KCB will also be making a similar arrangement to settle the rm35.6 million in debt owed by its subsidiary to FACB Industries Inc Bhd.
The proposed capitalization to Chen and FACB will reduce the company’s debt to a more manageable level. In addition, it will allow KCB to utilize its proceeds raised from the proposed rights issue with warrants for other purposes.
As at March 2012, KCB’s borrowings stood at rm389 million. Following the capital reduction, rights and warrants issuance puts debt repayment, KCB’s borrowings will be reduced substantially to rm37.5 million while its gearing ratio will improve to 0.04 times.
Chen stake could increase to 80.76% following the exercise, which would trigger an obligation for a MGO. However Chen stated that it does not intend to undertake the MGO and will be seeking exemption from the SC.
Scomi Grp/IJM Corp:Scomi Grp and IJM Corp have agreed to extend the cut off date for the fulfillment of conditions precedent for the completion of a proposed rm110 million convertible bond issue to Feb 11 2012. Among the matter is the condition s required for the proposed bond issue were approvals from the SC which is still pending. Then after the requisite approvals are obtained, the company is likely to call for an EGM to vote on the proposed issue of convertible bonds to IJM Corp.
IJM Corp has made known that it would give up its stake if the proposed bond issue not materialize. In other words, existing shareholders could block IJM Corp’s entry by stopping the issue of bonds.
Takaso Res: It confirmed that it was unaware of any corporate development or explanation that could have given rise to the unusual trading activities in its securities. Meanwhile Bursahad also advised investors to exercise caution and to make informed decisions in the trading of Takaso. Bursawould not hesitate to take appropriate regulatory action to ensure fair and orderly trading of Takaso.
Gamuda Bhd: Its group MD Datuk Lin Yun Ling is not aware of market talk that a government-linked company (GLC) is looking to buy the group. Meanwhile his contract which would expire in June 2013 and it is up to the board and declined to elaborate.
Lin has doubled his shareholdings in the company, increasing his stake from 1.7 per cent to 3.25 per cent.
Its current order book stood at over RM4.0 billion while its current landbank is worth over RM10 billion.
The group may be bidding for the double tracking rail (Gemas-Johor Baharu) contract when it opened for tender in 2013.
Astro: Rumors that Astro will be named a new component stock of the 30 member bellwether FTSE Bursa Malaysia KLCI at an upcoming revision later Dec 2012.
Market observers viewed that AStro currently still neither a growth nor a dividend stock. At current level (Dec 2012), the stock is also not cheap. Astro’s earnings for the nine months ended Oct 31 came in at only73% of consensus forecasts for the year ending Jan 31 2013. Its earnings for the fourth quarter ending Jan 31 could be weak on higher costs as Astro aggressively swaps its customers to the next generation Beyond.
AStro is entering a new capex cycle as competition intensifies….
Dijaya: It now (Dec 2012) has 847 acres of land with a GDV of rm38 billion following aggressive land acquisitions in Klang Valley , PenangIsland and Danga Bay.
It has the right ingredients to re rate upwards at its asset monetization phase, especially on the back of stronger property sales and other forms of asset monetization, including selected assets as REITs, healthy unbilled sales of close to rm733 million, recurring income of rm45.8 million in 2013 and its potential to play the role of an industry consolidator.
Its asset monetization efforts will include targeted property launches of rm1.6 billion, rm2.3 billion and rm2.5 billion in 2012, 2013 and 2014 respectively. Dijaya also disposed a small land parcel for rm106 million.
Also expecting Dijaya to significantly monetize some existing landbanks in KL and Penang, and to engage in a capital preservation scheme for the construction of W Hotel. All these efforts will greatly reduce Dijaya’s gearing and enhance working capital and cash flow.
In the medium term, Dijaya is in a good position to REIT its investment properties which could have a collective worth of rm1.6 billion including rm513 million from its future TropicanaGardens mall.
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