Bonia on overseas expansion drive (9288)

PETALING JAYA: While the major shareholders are maintaining that they do not intend to privatise Bonia Corp Bhd, the leatherware, shoes and apparel company will focus on an aggressive overseas expansion drive.
Group managing director Albert Chiang Heng Kieng told StarBiz
that the expansion in Indonesia and Vietnam, after reaching critical
mass, would keep the company busy for the next three to five years.
“We
started with joint ventures with local parties in these countries, and
now we are expanding our presence on our own. We are looking at setting
up our own retail stores there and also seek opportunities in the
Middle East,” he said.
He said although the retail market was going through challenging times, the family would continue to grow the business.
Bonia,
controlled by the Chiang family, was in the news recently after the
family and affiliates triggered a mandatory general offer (MGO)
following Freeway Team Sdn Bhd's
purchase of 35 million shares amounting to a 17.38% block in an
off-market deal at RM2.04 per share. Freeway Team is aligned to
executive chairman Chiang Sang Sem and his son Chiang Fong Yee.
That
ultimately raised the family's stake to 48.25% from 31.98%. Together
with the other parties aligned to the family, they currently hold
50.17% of Bonia shares, hence they are offering to buy up the remaining
49.83% of the shares they do not own.
“We have no intention to
privatise the company, the acquisition from friendly parties is just to
give the family the comfort of having a larger controlling stake, since
most of the second generation of the family are now working for the
company,” he said.
To be noted, the takeover offer is at a
significant 20.9% discount to its last traded share price of RM2.58
before the offer was made.
To this end, Albert said at an offer
price of RM2.04, it was about 10 times the price to earnings ratio of
Bonia, and prior to the fluctuation in share price, Bonia was traded at
the RM2.20 range.
Despite making the offer, the offerers said,
in its circular to shareholders, that they intended to maintain Bonia's
listing status. If the joint offerors (Freeway Team and parties)
reached a 90% acceptance level for the remaining shares it did not own
at the time of making the offer, the joint offerers could decide to
invoke the compulsory acquisition provision in the Capital Markets and
Services Act, and take steps to privatise the company.
Founded
by Sang Sem in 1974, Bonia began in the business of designing,
manufacturing and wholesaling of leather goods in Singapore. For the
first half to June 30, Bonia's net profit was up 7.13% to RM45.64mil.