Exclusive XingHe may place out 10-15% stake to international bank — source

by **Cals** Thu 02 Oct 2014, 02:25

Exclusive XingHe may place out 10-15% stake to international bank — source

Business & Markets 2014

Written by Liew Jia Teng of theedgemalaysia.com

Wednesday, 01 October 2014 13:53

KUALA LUMPUR (Oct 1): XingHe Holdings Bhd is expected to place out a 10% to 15% stake in the China-based peanut oil producer to an international bank soon, according to market source.

The source who declined to name the institutional investor and provide further details on the exercise, said the international bank intended to buy as much as 15% stake in XingHe.

“Something good is on the table. An international bank will acquire a significant stake of 10-15% in XingHe through private placement,” the source told theedgemalaysia.com.

However, it remains to be seen whether XingHe Managing Director and substantial shareholder Ma Guo Liang is willing to place out more than 10% stake in the company.

Ma, together with his wife Li Hui Jun who is also the executive deputy chairman of XingHe, now have a collective 62.39% stake in the company.

They hold the stake through Testa Holdings Ltd.

The source said the new investor would provide additional funding for XingHe’s future expansion in China and Malaysia.

During a media familiarisation trip to China in late September, Ma said the group planned to lead a RMB400 million (RM210 million) investment in China to build a manufacturing plant for peanut protein powder production.

The new expansion will start in the first half of 2015, after the group successfully identifies a joint-venture (JV) partner.

In Malaysia, XingHe plans to set up a palm oil refinery with an annual capacity of 100,000 to 150,000 tonnes. The firm sees the potential in Malaysia to become the regional hub for the company's business expansion in South East Asia.

Today, XingHe shares, which was traded between 24 sen and 25.5 sen, rose 0.5 sen or 2% to settle at 24.5 sen at 12.30pm, for a market capitalisation of RM575 million.

The fourth most-active stock on Bursa Malaysia saw some 38 million shares done. For comparison, the FBM KLCI added 0.27 point or 0.01% at afternoon break.