Capital markets executive summary | Thu 19 Oct 2023

Capital markets executive summary | Thu 19 Oct 2023

Feytech to list on Main Market

The automotive cover and seat manufacturer published a prospectus exposure offering 252.94m shares. The public offer of 143.32m shares consists of 42.16m shares for the Malaysian public, 25.39m shares for directors and employees, and 75.87m shares via private placement to selected investors. The special offer of 109.62m shares involves privately placing 105.40m shares to bumiputra investors approved by the Ministry of Investment, Trade and Industry, and 4.22m shares to selected investors. The Johor-based company will use the IPO proceeds for its working capital and to fund the acquisition of land and construction of its Kulim Plant 2. Feytech’s net profit grew from RM18.13m in FY2020 to RM27.59m in FY2022. Revenue jumped from RM79.37m to RM126.88m. TA Securities is the principal adviser.

Tabung Haji still working out Menara ABS sukuk problem

In 2008, Citibank arranged the Menara ABS securitisation to help Telekom Malaysia Bhd raise funds for its Unifi project. TM sold Menara TM in Bangsar, Menara TM Semarak, TM Taman Desa and TM Cyberjaya to Menara ABS and in return agreed to lease the assets with the option, upon expiry, to buy back the properties or extend the lease. The RM1b sukuk ijarah were subscribed for by, among others, the Employees Provident Fund (EPF) and Lembaga Tabung Haji (LTH), which invested RM600m. In Dec 2022, TM opted against buying back the properties and decided to shrink its tenancy at Menara TM from 70% to 10%. Earlier this year, it announced the relocation to TM Annexe 1, TM Annexe 2 and offices in Cyberjaya. Long after the legal maturity of the sukuk on 13 Jan has passed, LTH is still discussing with other stakeholders to find the best solution for the sukuk redemption, although it is against any asset disposal below market value. In Jan, Menara ABS defaulted on RM345m Tranche A (downgraded to D rating) and RM500m Tranche C (unrated). In 2022, TM Taman Desa was sold for RM35.3m while TM Cyberjaya was purchased by TM for RM44.75m, the proceeds of which were used to partially redeem Tranche A. Menara TM Semarak was sold to Titijaya in Jul 2023 for RM72m. The sale of Menara TM, which represents 74% of the value of the portfolio, will determine the magnitude of LTH’s loss.
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AmBank extends RM450m financing for E&O’s project in Penang

The bank is providing the facility to Eastern & Oriental Bhd’s (E&O) wholly-owned subsidiary, Tanjung Pinang Development Sdn Bhd, for the development of the Andaman Island project. The company began its 1st project, The Meg, in Dec 2021, and since then has launched more than 1,400 units with 330 more expected next year. It obtained the GreenRe Platinum Provisional Certification for Phase 1 under the township category, which is a 1st in Malaysia. Tanjung Pinang is working with its architects and builders to minimise the use of new raw materials, and building materials have been selected with improved lifecycle to lower Andaman Island’s carbon footprint. Phase 1 has a gross development value of more than RM17b over 15 years. AMMB closed at RM3.81 while E&O closed at 59.5 sen.

Seni Jaya plans RM13.6m private placement

The outdoor advertising services provider will issue 29.12m shares or 10% of its issued shares to 3rd party investors to be identified later. Based on an indicative price of 46.6 sen or 25% discount, the company will raise RM13.57m in the maximum scenario. The proceeds are for the B-Star Verse exhibition project, expenditure relating to the LRT Ampang Line project, and upgrading existing billboards to digital billboards. The exercise, which will be completed by 4Q2023, will be Seni Jaya’s 1st equity fundraising in at least a year. Kenanga Investment Bank is the adviser and placement agent. The counter closed at 58 sen.

Shell signs long-term gas purchase with Qatar beyond 2050

Although European companies had earlier refused to sign long-term deals in favour of the region’s zero emissions goals, the attraction of such contracts has increased after the Ukraine war halted supplies via the Russian pipeline and forced European countries to prioritise energy security over sustainability targets. Shell plc’s agreement to buy liquefied natural gas (LNG) from QatarEnergy for 27 years from 2026 is the 2nd major contract signed by Qatar after France’s TotalEnergies last week. QatarEnergy will deliver 3.5m tons of LNG annually to Rotterdam’s Gate import terminal in the Netherlands. Qatar, which competes with the US and Australia, is seeking customers for its additional 64% output due to start in 2027. It has commitments for 18.8m tons a year or 40% of the 32m tonnes from the North Field East expansion and the 16m tonnes from North Field South.