Bintai Kinden in takeover of Singapore listed Lereno

KUALA LUMPUR: Bintai Kinden Corp Bhd and Biz Investment Pte. Ltd have proposed a takeover of Lereno Bio-Chem Ltd, which is listed on the Singapore Exchange’s Catalist Board in a deal valued at RM214.84 million.

Bintai Kinden said on Friday, July 8 said the company and Biz Investment would sell their 100% stake in Bintai Kindenko Pte Ltd (BKPL), representing 8.5 million shares, for RM214.84 million to be satisfied by the allotment and issuance of new securities in Lereno.

Bintai Kinden would dispose of its 69.82% stake for RM150,000 and Biz Investment of its 30.18% for RM64.84 million.

It added the RM214.84 million was based on the unaudited profit attributable to the equity holders of BKPL of about S$10.7 million for the financial year ended March 31, 2011 and its prospective earnings.

“Based on the consideration of RM214.84 million and the unaudited profit of approximately S$10.7 million attributable to the equity holders of BKPL, the price earnings multiple is approximately 8.18 times.

“The consideration of RM214.84 million is justified after taking into account the prospective earnings of

BKPL given its expected performance/earnings for the FYE March 2012 and its subsequent earnings from its present order book,” it said.

Based on BKPL’s audited consolidated financial statements of BKPL for the FYE March 2010, Bintai Kinden would realise an estimated gain of RM428,000 on a consolidated basis upon completion of the proposal.

Explaining its rational, it said BKPL, with its headquarters in Singapore, has to-date undertaken and completed numerous projects in Singapore, and has since expanded its operations regionally in Southeast Asia and China.

“It is the intention of the board to increase the international profile and stature of BKPL. The board believes that BKPL, through Lereno, would essentially be able to tap into alternative funding options leveraging on the Singapore capital markets and international banking community to complement the Malaysian financial markets for future funding needs and facilitate the plans for its future growth opportunities and regional expansion in the long term,” it said.

Bintai Kinden said it would also be to “unlock” its shareholding value in BKPL through its stake in a listed entity, namely Lereno.

It added Lereno is an integrated bio-TECHNOLOGY [] company with involved in biofuels processing comprising first and second generation of biofuels; upstream businesses (feedstock and bio-resources development); and downstream businesses (process engineering, downstream oleochemicals production).

On completion of the proposal, Bintai Kinden together with Biz Investment would hold more than 85% of the enlarged voting share capital of Lereno, while the public spread would be below 15%.

To restore the public spread, the Bintai Kinden, Biz Investment and/or Lereno would have to undertake a placement by selling the consideration shares and/or allotment of new Lereno shares to investors.

Bintai Kinden said if the public spread was not met, the shares of Lereno would be suspended from trading.