Ranhill to list via reverse takeover of Symphony House

by **Cals** Thu 27 Mar 2014, 12:37

Business & Markets 2014

Written by Charles Yong of theedgemalaysia.com

Thursday, 27 March 2014 11:06

KUALA LUMPUR: Having cancelled its initial public offering (IPO) last year, Ranhill Energy and Resources Bhd now aims to list on the Main Market of Bursa Malaysia through a reverse takeover (RTO) of Symphony House Bhd.

In a filing with the exchange yesterday, Symphony House announced that it has entered into a heads of agreement (HOA) with Ranhill Energy for the proposed RTO.

Under the HOA, Symphony House will acquire all the shares in Ranhill Group Sdn Bhd — a subsidiary of Ranhill Energy, by issuing new ordinary shares of RM1 each in Symphony House at an issue price of RM1.50 per share.

The price tag for Ranhill Group has yet to be decided. Hence, the number of shares Symphony House will issue to Ranhill Energy could not be determined at this stage.

Nevertheless, the issue price of RM1.50 represents a 15.4% premium compared with RM1.30, which is the adjusted price of Symphony House shares based on the five-day volume weighted average market price of 13 sen up to and including March 21. (Symphony House said it would consolidate every 10 existing shares of 10 sen each into one share of RM1 each.)

Symphony House suspended trading of its shares on Monday until yesterday pending the RTO announcement.

According to the filing, Ranhill Energy intends to seek an exemption from the obligation to undertake a mandatory takeover offer for all remaining Symphony House shares post-RTO.

“Symphony House’s shareholders are expected to benefit from the Ranhill group of companies’ experience in the energy and environment sectors, and its reliable cash flow from its contracts and concessions,” said both companies in a joint statement yesterday. Ranhill Group’s businesses include the provision of oil and gas engineering services, water supply and wastewater treatment services as well as power generation.

Meanwhile, before the RTO takes place, Symphony House will undertake a public offering of new shares and a renounceable rights issue on the basis of one new share for every existing share held at a book closure date to be determined.

Funds raised will be used for paring down debts, business expansion, working capital as well as to disburse expenses related to the proposal, among others.

Symphony House, which provides business process outsourcing services, added that its current management team headed by group chief executive officer Tan Sri Mohd Azman Yahya and executive director Abdul Hamid Sheikh Mohamed would buy out all the group’s existing businesses for RM60 million cash.

Azman Yahya, who is also the current acting chairman, will remain as a shareholder and helm Symphony House after the RTO. He will also remain as chairman of the company.

He has volunteered for a three-year share moratorium in respect of Symphony House shares held by him prior to the public offering of new shares.

Ranhill Energy, which is controlled by Tan Sri Hamdan Mohamad, terminated its IPO plans in July last year after news emerged that it failed to disclose the suspension of an affiliate company’s licences by Petroliam Nasional Bhd. The IPO was supposed to raise proceeds of RM753 million.

In a separate development, shares in Symphony Life Bhd, a property developer where Azman Yahya is also a major shareholder, saw active trades and rose 3.5 sen or 3.6% to close at RM1. Market observers said the Symphony House RTO deal has also drawn interest to Azman Yahya-related counters.

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Azman Yahya will remain as a shareholder and helm Symphony House after the reverse takeover.

This article first appeared in The Edge Financial Daily, on March 27, 2014.