Hot Stock Sumatec climbs 4.4% on the back of proposed R&A deal

by **Cals** Wed 04 May 2016, 21:47

Hot Stock

[size=28]Sumatec climbs 4.4% on the back of proposed R&A deal

By Meena Lakshana / theedgemarkets.com | May 4, 2016 : 4:19 PM MYT
KUALA LUMPUR (May 4): Shares of Sumatec Resources Bhd rose as high as 4.35% following news that the company will own a special purpose vehicle (SPV), which will then be sold to R&A Telecommunication Group Bhd in exchange for new R&A shares.
At 3.41pm, the stock gained as much as five sen to 12 sen with a volume of 7.19 million shares traded.
Sumatec shares dropped from 22 sen on May 6 last year to a one-year low of 10.5 sen on Aug 24 before rebounding to current levels.
Earlier today, Practice Note 17 company R&A Telecommunication Group Bhd announced that it has proposed to buy the entire stake in a shipping-based SPV for RM150 million as part of its regularisation plan to remain listed on the ACE market of Bursa Malaysia.
Under the deal, Semua International Sdn Bhd (SSSB) will transfer its entire stake to the SPV, which will be owned by SSSB shareholders, namely Sumatec and Ebony Ritz Sdn Bhd and Singapore-listed Hoe Leong Corp Ltd, in similar shareholding proportions.
Sumatec and Ebony Ritz each hold a 49% stake in SSSB while Hoe Leong controls the remaining 2% stake. Hoe Leong owns a controlling 80% stake in Ebony Ritz while Auspicious Journey Sdn Bhd holds 20% in Ebony Ritz.
R&A said it would then sign a share purchase agreement for the acquisition of the 100% stake in the SPV and will issue new R&A shares at 10 sen each to Sumatec and Hoe Leong.
SSSB owned six product tankers, which have long-term charters with Shell Malaysia. 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.
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