Capital markets executive summary | Wed 10 Jan 2024

Capital markets executive summary | Wed 10 Jan 2024

Bursa approves SBH Marine’s listing

The company, which will list on the ACE Market, processes and sells frozen shrimp, squid, octopus and cuttlefish, and farms black tiger prawns and whiteleg shrimp in Perak. The IPO entails the issuance of 180m new shares and an offer for sale of 50m existing shares. 45m shares are for the Malaysian public via balloting, 36m for directors, employees and persons who have contributed, 61m for bumiputra investors approved by Miti, and 38m for private placement to selected investors. The 50m existing shares offered for sale are for bumiputra investors approved by Miti. The IPO proceeds will be used for the ongoing development of the Selinsing farm and for the construction of a new seafood processing plant in Kuala Kurau, Perak. The existing processing plant in Kuala Kurau has a capacity of 4,800 tonnes annually. SBH Marine’s products are exported to Europe, the Middle East and Asia. KAF Investment Bank is the principal adviser, sponsor, sole underwriter and sole placement agent.

Johari Abdul Ghani launches MGO for KUB

The Minister of Plantation Industries and Commodities owns 98.75% of JAG Capital Holdings Bhd, which launched a voluntary takeover of KUB Malaysia Bhd on 8 Jan. Yesterday, JAG bought 1.79m KUB shares in the open market raising its shareholding to 185.19m shares or 33.28% to trigger the mandatory general offer (MGO). The MGO and the voluntary offer were made at 60 sen per share. JAG will not keep KUB’s listing status if it gets 90% of KUB shares. KUB had earlier proposed to acquire JAG’s 86.65% interest in Central Cables Bhd in exchange for 199.035m 5-year redeemable convertible preference shares (RCPS) at 60 sen, valuing the deal at RM119.42m. KUB will offer to acquire the remaining 13.35% of CCB for RM18.4m in cash or RCPS. The takeover offer values KUB at 17.6 to 18.7 times historical price-to-earnings ratio if KUB fully acquires CCB and the RCPS are converted. Central Cables’ net profit surged from RM2.03m in FY Jun 2022 to RM11.65m in FY Jun 2023. Revenue jumped 41.69% from RM140.55m to RM199.15m. KUB, which sells liquefied petroleum gas, posted a higher net profit by 86% from RM18.28m in FY2022 to RM34m in FY2023. Revenue slipped 10.78% from RM547.96m to RM488.89m. KUB closed at 59.5 sen, up 29% from its May 2023 low.
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KPS sells 50% of King Koil to Hong Kong’s AI Dream

Selangor state-controlled Kumpulan Perangsang Selangor Bhd’s (KPS) wholly-owned subsidiary Bold Approach Sdn Bhd signed a conditional share sale agreement to sell 50% in Kaiserkorp Corp Sdn Bhd to AI Dream (HK) Ltd for RM265.48m cash in USD. In May 2016, KPS bought 60% of Kaiserkorp, which wholly owns US-based King Koil Licensing Co Inc, the manufacturer of King Koil mattresses, for USD28.8m. AI Dream is wholly-owned by AI Dream 3 (Cayman) Ltd. Concurrently, Yeoh Jin Hoe will divest 30% in Kaiserkorp to AI Dream, leaving him with a balance of 10%. The sale consideration will be determined after Kaiserkorp’s audited consolidated financial statements for FY2023 are given to AI Dream by 29 Feb 2024. The estimated sale consideration of RM265.48m will result in KPS recognising a RM117.43m gain on disposal. KPS will set aside more than 70% of the proceeds to repay borrowings and 19% for working capital. The company will pay a special dividend of up to RM24.2m or 4.5 sen based on 537.39m shares at 2 Jan 2024. RHB is KPS’ adviser for the proposed divestment, which should be completed in 1Q2024. KPS closed at 83.5 sen.

FIMM rebukes consultant for misconduct

The Federation of Investment Managers Malaysia (FIMM) reprimanded Ismail Md Hashim, a unit trust scheme (UTS) and private retirement scheme consultant of Public Mutual Bhd for his misconduct and breach of Clauses 3.1.3(a) and 3.1.11(g) of FIMM’s Code, and Rules 4.1.1, 4.2.1 and 4.3.1(c) of FIMM’s Consolidated Rules (FCR). Ismail withdrew money from an investor’s EPF account for a UTS investment with Public Mutual without the investor’s prior consent. He made the investor pre-sign and pre-thumbprint an investment application form and the EPF form used for the transaction. He forged the signatures of the investor and his downline on a suitability assessment form and assigned the transaction to his downline without the knowledge of his downline and the investor. Ismail may not register with FIMM for 2 years from 5 Dec 2023 pursuant to Rule 6.6.1(b)(x) of the FCR. After the period is over, he must attend training on FIMM’s Code of Ethics pursuant to Rule 6.6.1(b)(v) of the FCR if he wants to re-register with FIMM.

HP may acquire Juniper Networks this week

Hewlett Packard Enterprise is in advanced negotiations to buy the network gear manufacturer for USD13b to strengthen its artificial intelligence (AI) offerings. In 2023, HP, which makes servers, announced it will launch a cloud computing service to power AI systems similar to ChatGPT. Juniper’s technology fits in with HP’s services because it produces high-performance equipment for routing, switching, wifi, network security, AI-enabled enterprise networking operations and software-defined networking.