Capital markets executive summary | Mon 27 Nov 2023

Capital markets executive summary | Mon 27 Nov 2023

CGMI obtains Bursa Malaysia approval for ACE Market listing

The information and communication technology (ICT) managed services provider serves the food and beverage sector (F&B) and hospitals. The company will issue 110m new shares or 16.39% of its enlarged issued shares. 33.55m shares are for the public. 11.3m shares are for directors and employees. 48.37m shares are for selected investors via private placement. 16.78m shares are for private placement to identified bumiputra investors. 67.1m existing shares will also be offered for sale. The company’s profit after tax grew 10.22% on average from RM12.13m in FY ended 30 Jun 2021 to RM13.37m in FY2023. Revenue climbed 10.36% on average from RM53.91m to RM65.67m. The company plans a dividend policy of at least 30% of its net profit. The IPO proceeds will be used to improve its system architecture, relocate its ICT managed services for the hospital information systems business segment to a larger office, establish a new technical support centre in northern Thailand to serve the F&B sector, and set up new regional offices in Cambodia and Brunei. MIDF Amanah is the principal adviser, sole underwriter and placement agent.

Telekosang sukuk and bonds stay on negative rating watch

RAM Ratings maintained the rating watch on the AA3 rated RM470m ASEAN Green SRI sukuk and A2 rated RM120m ASEAN Green junior bonds issued by Telekosang Hydro One Sdn Bhd. Continued delays in completing the 16MW Plant 2 and in receiving liquidated damages (LD) could result in the finance service reserve account (FSRA) balance being insufficient. Negotiations with the EPCC contractor target completion and LD payment for the 24MW Plant 1 and Plant 2 by Feb 2024. Plant 2 is currently in commissioning and testing, and is targeted to begin feed-in tariff in Dec 2023. The EPCC contractor is completing outstanding non-essential works for Plant 2 and minor remedial work for Plant 1 to meet the Feb 2024 deadline. Cash balances of RM19.8m as at 23 Nov 2023 are enough for RM12.48m profit and coupon payments due in Feb 2024. Notwithstanding, the FSRA balance will be short of the RM32.2m required minimum if the LD remains outstanding. The RM25m LD payable by the EPCC contractor is backed by RM45m performance bonds. The company has until 5 Mar 2024 to remedy a breach of the minimum FSRA balance covenant. The company may seek shareholders’ cash injection to avoid the breach.
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UMW’s sukuk ratings still on developing watch

UMW Holdings Berhad’s AA+ rated RM2b sukuk musharakah programme and AA- rated RM2b perpetual sukuk programme have been placed on MARCWatch Developing since 25 Aug 2023 because of the proposed changes to UMW’s shareholding structure. Permodalan Nasional Berhad (PNB) had entered into a sale and purchase agreement for the sale of its 61.18% shareholding in UMW to Sime Darby Enterprise Sdn Bhd, wholly-owned by Sime Darby Berhad, for RM3.57b. The shareholders of Sime Darby approved the acquisition from PNB and the mandatory general offer for the remaining 38.82% in an extraordinary general meeting on 16 Nov 2023. The sale of PNB’s interest in UMW is expected to be completed by end-Nov 2023. The rating watch will be resolved after MARC performs a full assessment of the effect of the change in shareholding structure on UMW’s credit profile. UMW closed at RM4.91 while Sime Darby closed at RM2.37.

Berjaya Corporation’s subsidiary lodges Catalist listing documents

Singapore Institute of Advanced Medicine Holdings (SIAMH) provides healthcare services using advanced technology for early diagnosis and offers treatments for health conditions including cancer, and neurodegenerative and cardiovascular diseases. The company has struck long-standing relationships with global suppliers of advanced medical and healthcare technologies, and with private and public institutions. SIAMH operates at Biopolis Drive and Lucky Plaza, and plans to create a one-stop ambulatory cancer centre. The Biopolis Drive clinic is a reference site for Philips Electronics Singapore on the application of Philips’ equipment and solutions in a clinical environment. Berjaya Corporation closed at 30 sen.

IHH associate sells hospital in India

Fortis Malar Hospitals Ltd and Fortis Health Management Ltd, both subsidiaries of Fortis Healthcare Ltd, which is 31.17%-owned by IHH Healthcare Bhd, entered into agreements to sell Fortis Malar Hospital in Chennai to MGM Healthcare Pvt Ltd for RM71.9m. The sale is subject to the approvals of Fortis Healthcare and Fortis Malar Hospitals’ shareholders. Fortis Malar Hospital was established in 1992 and was acquired by Fortis Healthcare in early 2008. It is one of the largest corporate hospitals in Chennai with 170 beds and provides medical care in cardiology and cardiac surgery, neuro surgery, gynaecology, orthopedics, gastroenterology, neurology, paediatrics, diabetics, nephrology and internal medicine. IHH closed at RM5.80.