Envair gets support letter for financing

KUALA LUMPUR: Envair Holding Bhd has obtained a letter of support from a local bank for the financing of up to US$100mil (RM314mil) in relation to a proposed deal where it is expected to buy and then sell two million barrels of light crude oil per month to a Chinese company, according to a top official.

“We have also submitted applications to the relevant parties for the necessary licences to do this trading deal,” executive director Mohd Anuar Mohd Hanadzlah said.

“We are working on it,” he added without elaborating.
Jaikishan : ‘I bought one million shares two to three days ago and another one million today (yesterday) off the market.’

Envair had last month said it would supply two million barrels of light crude oil, reportedly to be sourced from Petroliam Nasional Bhd, on a monthly basis for 60 months to a China-based company in a deal that works out to a whopping US$182mil (RM571mil) based on the market price of US$91 a barrel.

That was many times more compared with the company's half-year revenue of RM316,000, analysts pointed out.

The deal stoked concern among analysts and investors alike as to how a seemingly unknown company that started out as a manufacturer of air and water filters could strike such a huge deal.

The rapid entrance and exit of a substantial shareholder in the company Chinese national Jiang Chuan Yi was also a cause for concern.

Envair shares surged in early October from 11 sen to 40 sen in early November before the company formally unveiled its plans to venture into the oil and gas industry.

On Dec 2, Carpet Raya Sdn Bhd director Deepak Jaikishan emerged as a substantial shareholder with a 5.06% stake in Envair. He bought it for 22 sen per share or RM1.32mil.

On the same day, Datuk Teh Chee Teong, a former Envair director, sold 15.8 million shares in off-market transactions. No selling price was disclosed.

Jaikishan did not divulge from whom he purchased his block of shares, saying only: “I took it as an opportunity to come in on the cheap.”

In an interview with StarBizWeek, Jaikishan, whose family is in the business of carpet trading and property investment, said he bought into Envair based on the company's foray into the oil and gas industry.

“Right now, that's the only reason it is exciting,” he said.

While declining to comment on the profits his personal businesses generated, the 39-year-old businessman said he would like to contribute in terms of finance to Envair.

“But I also want to take an active role in Envair's business. I've met some of its (substantial) shareholders,” he said.

According to Jaikishan, Envair is expected to call for a shareholders' meeting soon to seek his appointment to the board.

He also said he was in discussions to further increase his stake in the company.

“I bought one million shares two to three days ago and another one million today (yesterday) off the market,” he said.

Mohd Anuar declined to elaborate when asked about the emergence of Jaikishan in Envair.

“Yes, I know him,” he said, adding that he (Anuar) himself had no stake in the firm.

For the third quarter ended Sept 30, Envair had a net loss of RM900,000 against a net loss of RM1.29mil a year earlier.

The stock ended 0.5 sen up at 27 sen yesterday.