Capital markets news summary for Tue 14 Mar 2023

Capital markets news summary for Tue 14 Mar 2023

Rashid Manaf to become controlling shareholder of EATech

The company – which has been classified as PN17 since 28 Feb 2022 – announced a consolidation of 530.5m shares to 35.37m, or 15-to-1. EA Technique (EATech) closed at 29 sen, meaning the consolidated shares will be worth RM4.35 each. The company also executed a subscription agreement for Rashid’s investment vehicle – Eco Offshore Services (EOS) – to subscribe for 46.86m shares or 53% of the enlarged share capital. Subscription agreements were also signed with Tan Sri Abdul Halim Ali and Khiruddin Ibrahim Said for them to subscribe for 3.09m new shares each. The subscription price is RM1.131, a 74% discount to the market price. While Rashid is bound to extend a mandatory general offer (MGO) for the remaining shares he does not own, he intends to keep EATech listed. Sindora, Kulim, Halim and Khiruddin have undertaken not to accept the MGO. From the issuance proceeds of RM60m, RM32m will be paid to creditors. RM26m will partly settle a debt of RM41.3m owed to Sindora connected to a corporate guarantee for works related to Malaysia Marine and Heavy Engineering. The balance RM15.3m will be repaid over 3 years via internally generated funds.

Pimpinan Ehsan expands regularisation plan to include Kelantan RE assets

The company signed an agreement with B.Grimm Power, reNikola, Boumhidi Adel and Tengku Zaiton Ibni Sultan Abu Bakar to purchase Idiwan Solar which operates a 45 MW solar photovoltaic plant in Machang. The Machang asset will add to the 4 – in Arau, Gebeng, Pekan and Kuala Muda – already in the regularisation plan. All 5 projects are in commercial operation generating 178 MW in total. Pimpinan Ehsan will also acquire 3 companies which own the project lands plus several reNikola subsidiaries planned for the renewable energy (RE) business. The total purchase consideration for the RE assets is RM339.4m to be satisfied via the issuance of 144.9m new shares at RM1.07 per share, and 143.3 million new shares at RM1.2867. Thailand’s B.Grimm will emerge as substantial shareholder. Apart from solar, reNikola will be developing 4 biogas plants in Pahang with total 5.6 MW capacity awarded to it by the Sustainable Energy Development Authority. The power purchase agreements have been signed with Tenaga Nasional Berhad. The regularisation plan will be completed in 4Q2023. The counter closed at RM1.24.

Bermaz Auto 3Q net profit up 114%

The company posted higher earnings of RM87.29m for the quarter ended 31 Jan compared with RM40.71m a year ago. Earnings per share correspondingly rose from 3.5 sen to 7.5 sen. Revenue increased by 56.63% from RM623.13m to RM975.97m. The strong performance was due to fulfilling order backlogs prior to the expiration of the sale and service tax waiver. The company distributes Mazda, Peugeot and Kia vehicles. It will pay a 3rd interim dividend of 4.5 sen per share on 5 May, for a total of 11 sen so far. For 9M2023, revenue was up 73.44% from RM1.43b to RM2.48b, while net profit jumped 163.73% from RM77.02m to RM201.13m. The gross margin for its Mazda operations improved due to a change in the sales mix and a stronger ringgit against the yen. Moving forward, the company expects challenges from microchip and component supply shortage, delays in vehicle delivery, tighter financial conditions, uncertainties overflowing from geopolitical conflicts and a weaker global economy. The counter closed at RM2.12.

Pengerang Energy Complex signs USD102b key agreements

The company – which is a subsidiary of Singapore-based energy and petrochemicals developer ChemOne – is constructing a USD4.5b aromatics complex scheduled for completion in late 2026. The agreements – for feedstock supply and product offtake – were executed with California-based Chevron, Norway’s Equinor, Thailand’s PTT and Japan’s Mitsui for a 12-year term. Among the products to be manufactured include paraxylene – building blocks to produce chemicals for the plastics industry – and hydrogen for sustainable aviation fuels and biofuels. The company projects annual export turnover at USD5b. The financing for the project is expected to be concluded in 2Q2023 with the support of USD2.5b in export guarantee facilities from global export credit agencies.

China’s WeRide files for USD500m IPO in the US

The Chinese government is sceptical of Chinese companies listing overseas, cracking down on such companies like Didi Global with sensitive data which listed in 2021. WeRide plans to address the issue by outsourcing data collection to an entity that will not participate in the US listing. In 2022, the company was considering listing either in the US or Hong Kong. It was valued at USD4.4b in a Mar 2022 fundraising. WeRide was founded in 2017 and the Guangzhou-based startup develops autonomous driving technology which it is testing in 25 cities worldwide. In addition, the company produces robotaxis, mini buses, vans and street sweepers. The company is backed by the Renault-Nissan-Mitsubishi Alliance, Guangzhou Automobile Group, Bosch and private equity firm Carlyle Group.