Kulim to list O&G services unit this year

by **Cals** Tue 15 Apr 2014, 11:45

Business & Markets 2014

Written by Charlotte Chong of theedgemalaysia.com

Tuesday, 15 April 2014 09:54

KUALA LUMPUR: Oil palm plantation firm Kulim (Malaysia) Bhd plans to list its indirect oil and gas services unit E.A. Technique (M) Bhd on the Main Market of Bursa Malaysia to repay borrowings, finance its business activities and expansion plans, and for working capital.

E.A. Technique is a 51%-owned subsidiary of Sindora Bhd, which is wholly-owned by Kulim. The remaining 34% and 15% of E.A. Technique are held by its managing director Datuk Abdul Hak Md Amin and his wife Datin Hamidah Omar respectively.

In a filing with Bursa Malaysia yesterday, Kulim said the proposed initial public offering (IPO) will also provide an opportunity for the investing community to participate directly in E.A. Technique’s equity and continuing growth, which is a distinct and separate business from Kulim, as well as enable the company to gain recognition and corporate stature through its listing status.

Kulim said the applications to the relevant authorities will be submitted within the next month and expects the proposed IPO to be completed by the end of this year.

To facilitate the proposed IPO, Sindora has entered into a conditional share sale and purchase agreement with Abdul Hak and Hamidah to acquire 56.1 million shares of par value of 25 sen each, or 14.4% of the present issued share capital of E.A. Technique for RM30.3 million cash.

Following the acquisition by Sindora, it will hold 65.4% of E.A. Technique, while Abdul Hak and Hamidah’s shareholding will be reduced to 24.6% and 10% respectively.

Under the proposed IPO, E.A. Technique plans to sell up to 22.6% of its enlarged issued share capital or 114 million new shares to the public.

Out of the 114 million new shares, about 25.2 million or 5% of the shares will be made available for application by the Malaysian public through the balloting process.

Another 15.6% or 78.8 million shares will be allocated by way of placement to institutional and selected investors to be identified at a later date, while the rest will be reserved for eligible directors and employees of E.A. Technique and its subsidiary, Johor Shipyard and Engineering Sdn Bhd.

The company’s existing shareholders Abdul Hak and Hamidah will also sell 15 million existing shares or 3% of the enlarged share capital through the offer for sale route by way of placement to institutional and selected investors to be identified at a later date. The proceeds raised from the proposed offer for sale will be accrued to the offerors.

Kulim said the offer price will be determined at a later date after the receipt of the approvals from the relevant authorities for the proposed IPO and closer to the date of the prospectus launch, after taking into consideration, among others, the prevailing equity market conditions at that time.

E.A. Technique raked in a net profit of RM16.5 million for its financial year ended Dec 31, 2013, an increase of 19% from RM13.9 million a year ago. Its revenue came in 17.9% higher at RM121.1 million from RM102.7 million the previous year.

RHB Investment Bank Bhd has been appointed the principal adviser for the proposed IPO.

This article first appeared in The Edge Financial Daily, on April 15, 2014.