29.03.2019
MSWG'S QUICK TAKE ON-ONGOING CORPORATE DEVELOPMENTS
MSCM HOLDINGS BERHAD (FORMERLY KNOWN AS PANPAGES BERHAD)
- PROPOSED ACQUISITION OF 100% EQUITY INTEREST IN ACE WORLDWIDE LEASING SDN. BHD. FOR A TOTAL CASH CONSIDERATION OF RM3.0 MILLION
The Board of Directors of MSCM Holdings Berhad (“MSCM”) wishes to announce that it has on 26 March 2019 entered into a Shares Sale Agreement with Ace Credit (M) Sdn. Bhd. to acquire 3,000,000 ordinary shares in Ace Worldwide Leasing Sdn. Bhd. ("Ace") representing 100% equity interest in Ace for a purchase consideration of Ringgit Malaysia Three Million (RM3,000,000.00).
Full details of the announcement is set out in the file attached.
This announcement is dated 26 March 2019.
Source:
http://www.bursamalaysia.com/market/listed-companies/company-announcements/6105577
http://www.bursamalaysia.com/market/listed-companies/company-announcements/6107773
MSWG’s comment:
According to MSCM’s announcement dated 26 March 2019 and the reply to Bursa Securities’s query on 27 March 2019, the proposed acquisition of Ace is to enable it to diversify its business operations and income stream. In addition, the exercise may enable the Company to source and lease vehicles for its cold room business.
However, we find the announcements lack clarity in explaining how the proposed acquisition could complement and create synergy with MSCM’s existing businesses given Ace is currently dormant - with intention to carry the business activities to provide capital, credit facility and the business of money lending.
How long has Ace been dormant? Why and, given the circumstances, how positive is MSCM’s management in making Ace profitable and making it contribute meaningfully to the Group’s top-line and bottom-line?
MSCM provides business data and marketing services to SMEs and corporate clients. It specializes in the development of business platform, print directory and content development. It has also invested in an associate company which is involved in the operation of a supermarket chain.
On the other hand, Ace has obtained the necessary written acknowledgement from Bank Negara Malaysia (“BNM”) to carry out leasing business from BNM This is not tantamount to a license. As at 30 April 2018, its net asset value amounted to RM2.93 million.
Notwithstanding this, if Ace fails to obtain the necessary license to start the credit leasing business, what is the mitigation measure to be taken by MSCM to improve its top-line and bottom-line performance? How could will MSCM realize its investment in Ace?
On the purchase consideration, in its reply letter to Bursa Securities, the Company stated that there was a premium of RM71,283.00 over the audited net assets of Ace as at 30 April 2018 taking into consideration the cost of set up of Ace and cost of maintaining Ace for about 16 years. Such costs of doing business would have all been reflected in the net assets. what is the justification for the premium though the amount may not be that substantial? Moreover, what is the justification for any goodwill given that Ace has been dormant?
MSCM has been making losses since 2016. For the nine months ended 31 December 2018, revenue decreased to RM9.52 million compared to RM23.11 million in the last corresponding period. Net loss narrowed to RM5 million compared to RM6.65 million last year.
Shareholders may want to follow up on these matters in MSCM’s upcoming AGM.
MSWG’S AGM WEEKLY WATCH 1 – 5 April 2019
For this week, the following are the AGMs/EGMs of companies which are in the Minority Shareholders Watch Group’s (MSWG) watch list.
The summary of points of interest is highlighted here, while the details of the questions to the companies can be obtained via MSWG’s website at www.mswg.org.my.
|
Date & Time |
Company |
Venue |
|
03.04.19 (Wed) 10.30 am |
KLCC Property Holdings Bhd (AGM) |
Mandarin Oriental Kuala Lumpur , KLCC |
|
Points of interest to be raised: |
|
|
Company |
Points/Issues to Be Raised |
|
KLCC Property Holdings Bhd (AGM) |
1. What are the Key Performance Indicators (“KPI”s) used in determining the payment of KLCC REIT Manager’s performance fees? (a) What is the market benchmark for REIT Manager’s performance fees? (b) Are performance fees solely payable in cash or a combination of cash and KLCCP shares? (c) Please explain the circumstances under which the KLCC REIT Manager is paid by KLCCP shares? 2. The Company has embarked to transform the office spaces at PETRONAS Tower 1, PETRONAS Tower 2 and Menara 3 PETRONAS into a “Workplace for Tomorrow” as disclosed on page 305 of the Annual Report. (a) What is the estimated cost of transforming the office space into “Workplace for Tomorrow” for all the buildings mentioned above? (b) When is the transformation of the “Workplace for Tomorrow” expected to be completed? |
MSWG’S WATCHLIST
BIO OSMO BERHAD (“BIO OSMO” or “The Company”)
The Board of Bio Osmo had on 21 February 2019 received the Notice from Kenanga IB, on behalf of the Joint Offerors to acquire all the remaining ordinary shares in Bio Osmo not already held by the Joint Offerors and persons acting in concert with them (“Offer Shares”) for a cash consideration of RM0.05 per Offer Share (“Offer Price”) (“Offer”).
In accordance with Paragraph 3.06 of the Rules on Take-Overs, Mergers and Compulsory Acquisitions, the Board (save for the Interested Directors), had on 21 February 2019 appointed DWA Advisory Sdn Bhd (“DWA Advisory”) as the independent adviser (“IA”) to advise the Non-Interested Directors and holders of the Offer Shares in relation to the Offer.
DWA Advisory had issued the Independent Advice Circular (“IAC”) on 25 March 2019 and is of the opinion that the Offer is NOT FAIR and NOT REASONABLE. Accordingly, DWA Advisory recommends that the shareolders to REJECT the Offer.
Shareholders are advised to read and consider the views and recommendation of DWA Advisory.
Source:
http://www.bursamalaysia.com/market/listed-companies/company-announcements/6069409
http://www.bursamalaysia.com/market/listed-companies/company-announcements/6103677
SIG GASES BERHAD (“BIO OSMO” or “The Company”)
The Board of Directors of SIGGAS wishes to announce that the Board has on even date received an offer letter dated 25 March 2019 from Air Liquide Malaysia Sdn Bhd (ALM) to acquire 23,000,000 ordinary shares in SIGSB, representing 100% equity interest therein (including the 40% minority shareholding owned and held by SIGSB in Iwatani-SIG Industrial Gases Sdn Bhd) from SIGGAS for a purchase consideration of RM226,586,000.
On behalf of the Board of Directors of SIGGAS (“Board”), Kenanga Investment Bank Berhad (“Kenanga IB”) wishes to announce that the Board has decided to accept the Offer. Further announcement(s) will be made upon the execution of the sale and purchase agreement pursuant to the Offer, detailing the terms, effects and all relevant disclosures in relation to the Offer as required under the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) (“Listing Requirements”).
The Proposed Disposal is a disposal of substantially all of SIGGAS’ assets which may result in SIGGAS being no longer suitable for continued listing on the Official List of Bursa Malaysia Securities Berhad (“Bursa Securities”) and as such, is deemed to be a major disposal pursuant to paragraph 10.11A of the Main Market Listing Requirements of Bursa Securities (“Listing Requirements”). As such, an independent adviser will be appointed to advise on, among others, the fairness and reasonableness of the Proposed Disposal.
Source:
http://www.bursamalaysia.com/market/listed-companies/company-announcements/6103661
http://www.bursamalaysia.com/market/listed-companies/company-announcements/6108441
MSWG’S VIGILANCE
PN17 Companies
- APFT BERHAD
- BERJAYA MEDIA BERHAD
- BERTAM ALLIANCE BERHAD
- BRAHIM’S HOLDINGS BERHAD
- CHINA AUTOMOBILE PARTS HOLDINGS LIMITED
- DAYA MATERIALS BERHAD
- EKA NOODLES BERHAD
- HB GLOBAL LIMITED
- KINSTEEL BHD
- KUANTAN FLOUR MILLS BERHAD
- MAA GROUP BERHAD
- MALAYSIA PACIFIC CORPORATION BERHAD
- MAXWELL INTERNATIONAL HOLDINGS BERHAD
- MULTI SPORTS HOLDINGS LTD
- PERISAI PETROLEUM TEKNOLOGI BERHAD
- STONE MASTER CORPORATION BERHAD
- SUMATEC RESOURCES BERHAD
- TH HEAVY ENGINEERING BERHAD
- UTUSAN MELAYU (MALAYSIA) BERHAD
- YFG BERHAD
GN3 Companies
- G NEPTUNE BERHAD
- IDIMENSION CONSOLIDATED BERHAR
- WINTONI GROUP BERHAD
Please refer to the link below for the latest status of the companies.
http://www.bursamalaysia.com/market/listed-companies/list-of-companies/pn17-and-gn3-companies/
Updates
Stone Master Corporation Berhad (“STONE”) has failed to make the Requisite Announcement on or before 28 February 2019 as stipulated in Bursa Malaysia Securities Berhad’s (“Bursa Securities”) letter dated 9 January 2019 and the Company's application for a further extension of time to make the Requisite Annoucement and submit the regularisation plan has been rejected by Bursa Securities.
http://www.bursamalaysia.com/market/listed-companies/company-announcements/6107381
REGULATORY NEWS
Malaysia champions sustainability agenda at Sustainable Capitalism Forum Malaysia
Liberalisation of Foreign Exchange Administration policies
http://www.bnm.gov.my/index.php?ch=en_press&pg=en_press&ac=4820&lang=en
The 2018 Bank Negara Malaysia Annual Report
http://www.bnm.gov.my/index.php?ch=en_press&pg=en_press&ac=4824&lang=en
LOCAL NEWS AND DEVELOPMENTS
Malaysia not entering recession, not suffering deflation
https://www.thestar.com.my/business/business-news/2019/03/28/no-recession-no-deflation/
EPF outsources RM117.56bil to external fund managers
https://www.thestar.com.my/business/business-news/2019/03/28/epf-outsources-rm117-56bil-to-external-fund-managers/
PNB declares 6 sen income distribution for ASB2, 5.5 sen for ASM
https://www.thestar.com.my/business/business-news/2019/03/28/pnb-declares-6-sen-income-distribution-for-asb2-5pt5-sen-for-asm/
Malaysia’s economy to grow between 4.7-4.8% - MITI
https://www.theedgemarkets.com/article/malaysias-economy-grow-between-4748-%E2%80%94-miti
Cover Story: SC looking to address Bursa’s conflicting roles
https://www.theedgemarkets.com/article/cover-story-sc-looking-address-bursas-conflicting-roles
Cover Story: Providing easier entry to capital markets
https://www.theedgemarkets.com/article/cover-story-providing-easier-entry-capital-markets
Too fast, too soon
https://www.focusmalaysia.my/Property/too-fast-too-soon
New Act to monitor political funding in Malaysia
https://www.focusmalaysia.my/Columns/new-act-to-monitor-political-funding-in-malaysia
SC enforcement wins a win for corporate governance
https://www.focusmalaysia.my/Markets/sc-enforcement-wins-a-win-for-corporate-governance
GLOBAL NEWS AND DEVELOPMENTS
Nissan boss was too powerful report finds
https://www.bbc.com/news/business-47717838
Lloyd’s of London blames £1bn loss on natural disasters
https://www.bbc.com/news/business-47717375
Wow Air failure strands thousands of passengers
https://www.bbc.com/news/business-47731043
Exclusive: China makes unprecedented proposals on tech, trade talks progress – U.S. officials
Exclusive: U.S. hired firm audits Russia’s Rusal for compliance with sanctions deal
Asiana Airlines CEO steps down after accounting fiasco
SE Asia stocks – Most up on bargain hunting; Malaysia slips on cbank outlook
Swedbank CEO fired after laundering allegations spiralled
Why are economists so bad at forecasting recessions?
The future is female in China’s wealth management industry
MSWG TEAM
Devanesan Evanson, Chief Executive Officer, [email protected]
Siva Yamini, Head, Corporate Services, [email protected]
Quah Ban Aik, Head, Corporate Monitoring, [email protected]
Hoo Ley Beng, Acting Head Research & Development, [email protected]
Norhisam Sidek, Manager, Corporate Monitoring, [email protected]
Lee Chee Meng, Manager, Corporate Monitoring, [email protected]
Lim Cian Yai, Senior Analyst, Corporate Monitoring, [email protected]
Nor Khalidah Mohd Khalil, Analyst, Corporate Monitoring, [email protected]
DISCLOSURE OF INTERESTS
• With regard to the companies mentioned, MSWG holds a minimum number of shares in all these companies covered in this newsletter except for MSCM Holdings Berhad, Bio Osmo Berhad and SIG Gases Berhad.
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The contents and the opinions expressed in this newsletter are based on information in the public domain and are intended to provide the user with general information and for reference only. Best efforts have been made to ensure that the information contained in this newsletter is accurate and current as at the date of publication. However, MSWG makes no express or implied warranty as to the accuracy or completeness of any such information and opinions contained in this newsletter. No information in this newsletter is intended to be or should be construed as a recommendation to buy or sell or an invitation to subscribe for any, of the subject securities, related investments or other financial instruments thereof.
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