July 3rd - Stocks To Watch MAS, Goh Ban Huat, Keladi Maju, Eco World, Uzma

by **Cals** Wed 02 Jul 2014, 23:26

Stocks To Watch MAS, Goh Ban Huat, Keladi Maju, Eco World, Uzma

Business & Markets 2014

Written by Wei Lynn Tang of theedgemalaysia.com

Wednesday, 02 July 2014 19:47

KUALA LUMPUR: Based on news flow and corporate announcements today, the stocks in focus tomorrow (July 3) could include: Malaysian Airline System Bhd, Goh Ban Huat Bhd, Keladi Maju Bhd, Eco World Development Group Bhd, and Uzma Bhd.

Malaysian Airline System Bhd (MAS) could be taken private by its controlling shareholder, Khazanah Nasional Bhd, according to a foreign news report today, quoting two people with direct knowledge of the matter.

“A de-listing would pave the way for Khazanah to revive the ailing carrier, possibly by selling off its profitable engineering, airport services or budget airline units, trimming its bloated payroll and installing a new management team,” said the news report, adding that Khazanah would need to pay only RM1.05 billion for the 30.6% stake that it does not already own.

“Khazanah’s board, chaired by Prime Minister Najib Razak, is expected to meet at the end of July, to discuss the plan, one of the people said, adding that an announcement would be made by year end.”

The sources added that the state investor is working with CIMB Investment Bank on the restructuring, but cautioned that the plan and its details are subject to change, depending on the ultimate decision by the government.

MAS gained 0.5 sen or 2.44% today, to close at 21 sen, with a market capitalisation of RM3.43 billion.

Goh Ban Huat Bhd (GBH) has announced a series of corporate proposals, that will transform the firm into an oil and gas (O&G) services player.

The first part of the exercise will see GBH selling its 13.93 acres land along Jalan Segambut to Keladi Maju Bhd, for a total cash consideration of RM192.4 million, which will see the group realising a net gain of approximately RM71.2 million from the sale.

In addition to the land disposal, GBH has entered into a share sale agreement (SSA) with several parties, to acquire a 35% stake in Global Mariner Offshore Services Sdn Bhd (GMOS) for RM38 million.

GMOS provides consulting and management services specialising in floating production and storage operator vessels (FPSO) and offshore marine services. It has an outstanding order book of approximately RM304 million, which is expected to contribute positively to the group’s future profitability, GBH said.

Simultaneously with the SSA, GBH has entered into a memorandum of agreement with Datuk Abdul Rahman bin Mohamed Shariff and Normala Mohd Sharif, to acquire the entire equity interest in Dynac Sdn Bhd — an engineering services provider and contractor for the O&G sector — for RM632 million.

The purchase consideration will be partly satisfied via RM210 million in cash, with the balance RM422 million satisfied via issuance of new GBH shares at an issue price of RM2.00 each.

This will result in a reverse take-over of GBH, and Abdul Rahman will emerge as the single largest shareholder in GBH, with more than 51% equity interest, subject to the acceptance level of the proposed mandatory general offer (MGO).

The acquisition of GMOS and Dynac will enable GBH to tap on the growing FPSO and oil & gas sector.

GBH was last traded at RM2.00, with a market capitalisation of RM371.5 million, before being suspended Tuesday afternoon.

Keladi Maju Bhd has proposed to acquire nine parcels of land mentioned above, from GBH, for RM192.4 million, which it will fund through internally-generated funds and/or bank borrowings.

“With the property development in Kedah forming the foundation of Keladi’s property development activities, the proposed acquisition allows Keladi to grow and expand its property development portfolio beyond Kedah,” the company said.

Keladi was last traded at 32.5 sen, before its suspension on Wednesday, with market capitalisation of RM246.5 million.

Eco World Development Group Bhd’s wholly-owned unit, Majestic Blossom Sdn Bhd, has entered into a conditional sale and purchase agreement with Univas (Far East) Sdn Bhd, to acquire 492.6572 acres of land nestled between the towns of Semenyih and Broga, for RM225.33 million cash.

“The estimated GDV for this project is approximately RM3.5 billion, and the project will be funded through external borrowings,” the company said.

The said land is located a mere 3 km away from Nottingham University, right before Broga Hills. The purchase consideration for the land translates into RM10.50 per square foot.

Over the last several months, Eco World had announced a series of acquisitions and corporate exercises, to boost its pipeline of projects. Upon completion of the proposed acquisition, the group’s land bank in Semenyih alone, will increase to approximately 1,500 acres, it said.

Eco World rose 4 sen to close at RM5.31 today, with a market capitalisation of RM1.34 billion.

Uzma Bhd is acquiring the entire equity interest in Premier Enterprise Corporation (M) Sdn Bhd (PEC)— an oil and gas (O&G) chemical trading outfit — for a total cash consideration of RM18.6 million.

PEC is principally engaged in the trading of oilfield chemicals and other commodities, which constitutes a similar services that Uzma is currently providing in the O&G sector.

In its filing to Bursa Malaysia, Uzma said that the acquisition would increase its market share in oilfield chemical and wider client’s profile. “Additionally, by combining the expertise of both companies, this will potentially reduce the costs of operations, via economies of scale,” it added.

Uzma fell 2 sen to close at RM3.66 yesterday, with a market capitalisation of RM968.9 million.