Highlight Sumatec to emerge as R&A's major shareholder?

by **Cals** Wed 04 May 2016, 21:39

Highlight

[size=28]Sumatec to emerge as R&A's major shareholder?

By Ahmad Naqib Idris / theedgemarkets.com | May 4, 2016 : 3:02 PM MYT

KUALA LUMPUR (May 4): Sumatec Resources Bhd and Singapore-listed Hoe Leong Corp Ltd will own a special purpose vehicle (SPV), which will be sold to R&A Telecommunication Group Bhd in exchange for new R&A shares.

Bursa Malaysia's Practice Note 17 entity R&A has proposed to buy the entire stake in the shipping-based SPV for RM150 million for its corporate revamp. R&A told Bursa Malaysia it would issue new R&A shares at 10 sen each to Sumatec and Hoe Leong.

Under the deal, R&A said it had initially signed a non-binding term sheet with Semua International Sdn Bhd for the proposed acquisition of a 100% stake in Semua Shipping Sdn Bhd (SSSB) for RM150 million.

R&A said SSSB owned six product tankers, which have long-term charters with Shell Malaysia.

According to R&A, Semua International will transfer its entire SSSB stake to the SPV, which will be owned by existing shareholders of Semua International in similar shareholding proportions.

Semua International shareholders comprise Sumatec and Ebony Ritz Sdn Bhd with each holding a 49% stake. Hoe Leong holds the remaining 2% stake.

Hoe Leong owns a controlling 80% stake in Ebony Ritz. Auspicious Journey Sdn Bhd holds 20% in Ebony Ritz.

R&A will then sign a share purchase agreement for the acquisition of the 100% stake in the SPV. R&A will issue new R&A shares at 10 sen each for the RM150 million deal.

At RM150 million, R&A will need to issue 1.5 billion new shares to the SPV owners. R&A has an existing issued base of 966.86 million shares.

R&A shares have not been traded so far today. Yesterday, the stock closed at 0.5 sen for a market capitalisation of RM4.8 million.

"The proposed acquisition is part of the company's regularisation plan to maintain its listing status on the ACE Market of Bursa Securities.

"Hence, the initial step of entering into the term sheet is to set the broad parameters of the transaction and allow the parties to outline the tentative terms and conditions as well as their understanding and intention in respect of the proposed acquisition," R&A said.

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