Affin: Ingress privatisation 'fair and reasonable'

by **Cals** Fri 17 May 2013, 15:51

Affin: Ingress privatisation 'fair and reasonable'
Business & Markets 2013
Written by Kamarul Anwar of theedgemalaysia.com
Friday, 17 May 2013 14:50

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KUALA LUMPUR (May 17): Ingress Corp Bhd’s major shareholders' offer to acquire the remaining shares of the automotive parts manufacturer is “fair and reasonable”, said independent adviser Affin Investment Bank.

In a circular today, Affin said the RM1.85 a share offer is a premium of 16.35%, 83.17% and 51.64% respectively over the highest, lowest and average closing prices of Ingress shares for the full year up to April 15, 2013.

“The offer provides the holders (of the shares) with an exit opportunity to realise their investment at RM1.85 per offer share which is at a premium to the historical prices,” said Affin.

Ingress executive chairman Datuk Rameli Musa and group executive adviser and founder Datuk Dr Ab Wahab Ismail had a day earlier offered to acquire the remaining Ingress shares they did not own. They plan to privatise the firm.

Rameli and Ab Wahab along with friendly parties collectively own 30.5% of Ingress’s share base. They had offered to acquire the remaining 69.5% in Ingress

The acquirers need to meet the acceptance level of 92.98% to suspend the trading of Ingress shares. If they hold 93.05% or more, the buyers can compulsorily acquire the remaining shares in the firm.

The deadline for the offer falls on May 28 of this year.

Affin has also noted Ingress dividend-payment history.

Affin said there is no assurance that Ingress which did not pay dividends in financial years ended January 31, 2010 to 2012, can declare dividends in the future as its business is capital-intensive.

“(The lack of dividend in the three financial years) was primarily due to the financial covenant imposed by its lenders,” Affin explained.

Meanwhile, Affin said Ingress could face difficulties maintaining its financial performance despite the automotive sector’s bright prospects in Thailand and Indonesia.

This is due to the influx of foreign cars into the emerging markets, resulting in Asian automakers adopting cost-cutting measures.

Affin which foresees Ingress facing difficulty securing new customers, also took into account the latter's continuous capital investment to remain competitive.