Pelaburan Mara buying 5% of THHE, say sources

by **Cals** Sun 21 Sep 2014, 18:47

Business & Markets 2014

Written by Jose Barrock of theedgemalaysia.com

Friday, 19 September 2014 09:51

KUALA LUMPUR: Pelaburan Mara Bhd (formerly known as Amanah Saham Mara Bhd) could surface as a substantial shareholder in pilgrim fund Lembaga Tabung Haji’s TH Heavy Engineering Bhd (THHE), sources said.
It is understood that Pelaburan Mara is close to concluding a deal to buy as much as 5% of THHE via a share placement exercise, with only a few minor issues left to be ironed out.
“At the latest, an announcement pertaining to the new substantial shareholder — Pelaburan Mara — could be made next week. At the soonest, tomorrow (today).
“Most of the negotiations have been concluded, so it should be made known soon,” an industry source said.
While Pelaburan Mara may initially acquire a 5% stake, the state-controlled fund is looking to increase its shareholding to as much as 10%, the source added.
Both Pelaburan Mara and THHE executives were not available for comment.
While Pelaburan Mara’s entry cost is not known, it is likely to depend on the five-day weighted average price of THHE shares.
Since early this month, THHE stock has been trading at between 80.5 sen and 83 sen, testing its 52-week low of 80 sen back on Sept 18, 2013.
The stock has been on a downward spiral since mid-August, as a result of the company announcing a bad set of results for the first half of this year.
For the six months ended June 30 of financial year 2014 (FY14), THHE suffered a net loss of RM4.5 million on RM206.8 million in revenue. For the second quarter of FY14, the company bled losses of almost RM6.2 million.
THHE did not give any reason for its dismal performance, but analysts said the bleeding was due to provisions of about RM9 million for two projects — a Permas fabrication job, and dry-docking for THHE and its partner McDermott’s pipe-laying barge. The provisions, however, were one-off, indicating better financial results in the coming months.
THHE ended trading at 81 sen yesterday, giving it a market capitalisation of RM821.9 million.

This article first appeared in The Edge Financial Daily, on September 19, 2014.