Stocks to watch: Tobacco, Notion Vtec, Adventa, KSTB could spark interest

Stocks to watch: Tobacco, Notion Vtec, Adventa, KSTB could spark interest
Business & Markets 2013
Written by Ho Wah Foon of theedgemalaysia.com
Monday, 07 October 2013 10:09

KUALA LUMPUR: Stocks that may attract investor interest today could include GHL SYSTEMS BHD [], tobacco firms, NOTION VTEC BHD [], ADVENTA BHD [] and KEJURUTERAAN SAMUDRA TIMUR BHD [] (KSTB).

GHL has proposed to make a takeover offer to acquire all of the shares in e-pay Asia Limited (EPY), a company listed on the Australian Stock Exchange, and to undertake a private placement of new shares to finance the EPY purchase.

Under the terms of the offer, EPY shareholders can opt for either cash or exchange their shares in EPY for shares in GHL. EPY shareholders who elect to receive cash will receive 40 Australian cents (RM1.99) per EPY share.

Alternatively, EPY shareholders who elect to receive GHL shares will receive 2.75 GHL shares for every EPY share held based on a valuation of 44 sen per GHL share.

GHL said it will also be seeking shareholder approval to undertake a 20% private placement of new shares of GHL’s enlarged share capital to Cycas, a unit of private equity fund Creador II, LLC, focused on the growth of capital investments in Southeast Asia. Proceeds from the private placement will partly finance the acquisition of EPY, said GHL.

Tobacco companies, such as British Amercian Tobacco Bhd (BAT) and JT INTERNATIONAL BHD [] (JTI), may come under focus after the director-general of the Royal Malaysian Customs Datuk Seri Khazali Ahmad said amendments to the Customs Act 1967 are being considered to provide for enhanced penalties for smuggling and selling smuggled cigarettes by retailers and other outlets. The Confederation of Malaysian Tobacco Manufacturers praised customs’ proposal for mandatory imprisonment for the trade in illegal cigarettes.

Notion VTec is acquiring a 19.9% stake in Australia-listed silver mining firm Alcyone Resources Ltd for A$4.88 million. In a statement to Bursa Malaysia last Friday, Notion VTec, which manufactures hard-disk drives, said the subscription of Alcyone shares at half an Australian cent each comes under Alcyone’s rights issue.

Notion VTec’s participation in Alcyone’s untaken rights issue will provide sufficient funds for certain mine upgrading works to bring its rock crushing capacity up and CONSTRUCTION [] of a power saving grid power line and a reagent mixing plant. All of these cost saving projects will be completed by end-December 2013, making it sustainable and profitable assuming no sharp drop in the silver price,” Notion VTec said.

The company said the share subscription is due for completion in November. Upon completion, Alcyone will issue 487.5 million free options in the firm to Notion VTec. If the company converts the options into Alcyone shares, Notion VTec’s stake in Alcyone will rise to an associate level of 27.1%. This will enable Notion VTec to equity account Alcyone’s earnings.

Adventa announced that its wholly-owned subsidiary, Sun Healthcare (M) Sdn Bhd, has signed a long-term exclusive distribution agreement with UK medical device company Crawford Healthcare Ltd.

Sun Healthcare will take over the exclusive sales and marketing of all of Crawford’s wound care products in Malaysia and Asean, leveraging its distribution network in the region.

KSTB has been awarded two three-year contracts, one for the provision of tubular handling for PC Myanmar (Hong Kong) Ltd and one for Petronas Carigali Myanmar Inc (PCMI) to run services for offshore and onshore drilling campaigns.



This article first appeared in The Edge Financial Daily, on October 07, 2013.