Navis: No plans to buy Xidelang stake

KUALA LUMPUR: Private equity company Navis Capital Partners is not planning to buy into China-based apparel and shoe-maker Xidelang Holdings Ltd (XDL) anytime soon, thus ending speculation that a buyout of the company is in the offing.
Navis
managing partner Nick Bloy said the private equity firm had earlier
considered this investment but had decided that it would not go ahead at
this point in time.
“We did look at it (XDL) about five months
ago, when we had informal discussions. However, we had then decided not
to pursue this investment now,” Bloy told StarBiz.
News
reports have stated that Navis, which manages close to RM10bil in funds,
is presently eyeing the 55% shareholding stake in XDL by its major
China-based shareholder, HongPeng International Holdings Ltd (HongPeng).
The
report in a local Mandarin daily newspaper said the Malaysian-based
private equity firm was looking to acquire the stake in XDL at about 1.2
times its book value.
In response to this report, XDL in an announcement to Bursa Malaysia
on Jan 5, said “Navis Capital had indicated its intention to acquire
the entire shareholdings of HongPeng in XDL during an informal
discussion.”
A few days later in another clarification to further
news reports on this development, XDL had told Bursa that the
discussions were only at an exploratory level and it was discontinued in
late November 2011.
The announcement also confirmed earlier
reports that major controlling shareholder HongPeng had been receiving
enquiries from external parties, including private equity firms, but
“HongPeng has no intention of selling its stake at this juncture.”
The
announcement by both Bloy and XDL marks a proper closure of this
possibility of stake selling by HongPeng, which reports said might have
been sparked off by its controlling major shareholder, Mark Ding Peng
Peng, as being dissapointed with the lacklustre share price performance.
A local business news earlier had also quoted Mercury Securities Sdn Bhd
head of research Edmund Tham as saying that Navis might offer between
60 sen and 90 sen a piece for the shares it did not already own in the
company.
Meanwhile, observers said the likely reason for this
confusion was the language and distance barrier between the management
of XDL and investors in Malaysia.
It is learnt that the
management at XDL would be conducting a total revamp of its investor
relations and public affairs teams in Malaysia to also include bilingual
staff and was planning to hold a video-conferencing briefing at least
every half-yearly for analysts and potential investors.
XDL had
been the third Chinese company to list in Malaysia and its shares had
mostly been trading at below its initial public offering price of 58 sen
in November 2009. The company’s shares, which had been actively traded
over the past few trading days, edged up 1.5 sen to 40 sen in
yesterday’s close.
Meanwhile, in a related development, Navis had
also earlier bought stakes into a Singapore-based industrial safety
footwear products maker, King’s Safetywear Ltd, by taking it private from the Singapore Stock Exchange in December 2008.
The
Malaysian private equity firm had said in November last year that it
was exiting King’s Safetywear and that it expected to complete this
transaction by early 2012. — By DANIEL KHOO

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