FRESH . . . The new hatched chicks at CAB Cakaran Sdn Bhd hatchery incubator in Seberang Jaya Industrial Park, Penang yesterday.
KUALA LUMPUR: A company linked to Indonesia’s billionaire Anthoni Salim has emerged as a substantial shareholder in CAB Cakaran
Corp Bhd after paying a high premium for a stake in the integrated poultry farmer.
In a filing with Bursa Malaysia, CAB Cakaran said the placement exercise, at an issue price of RM2.07 per share, would give Plant Wealth Holdings Ltd, a unit of KMP Investments Pte Ltd, between 6.79% and 9.1% stake in CAB Cakaran.
The ultimate shareholder of KMP is Anthoni Salim @ Liem Hwong Sen @ Liem Hong Sien by virtue of his entire shareholdings in KMP Private Ltd, which in turn is the sole shareholder of KMP Investments Pte Ltd.
The placement is expected to raise RM31.18mil for the company and help accelerate its expansion into Indonesia.
The issue price of RM2.07 represented 26.22% of CAB’s five-day weighted average share price up to and including Jan 15, according to the filing.
Shares in CAB Cakaran surged 7 sen, or 4.2%, on Monday, to a new all-time high of RM1.73.
According to Forbes, the Salim family is Indonesia’s third richest family in 2015 with a net worth of US$5.4bil (RM23.77bil).
The Salim Group is one of Indonesia’s biggest conglomerates with interests ranging from palm oil plantations to media companies. Salim Group’s Indofood Sukses Makmur also owns the world’s largest instant noodle producer.
“The equity participation of KMP Private Ltd via Plant Wealth as a strategic investor in CAB Cakaran will indirectly allow CAB to strengthen the company’s alliance with KMP Private Ltd and maintain a collaborative relationship. By leveraging on KMP Private Ltd’s market presence in Indonesia in the aspects of agribusiness and fast moving consumer goods, KMP Private Ltd’s capital relationship with CAB via Plant Wealth may facilitate CAB’s growth in the regional front, which as a result will contribute to the benefits of CAB’s customers and the existing shareholders of CAB,” said CAB.
CAB had signed a joint-venture agreement with Salim’s special purpose vehicle (SPV) company in Indonesia for the purpose of establishing a fully integrated poultry business in Indonesia on Dec 7 last year.
Under the agreement, the SPV would hold a 90% stake in the new joint-venture company and CAB Cakaran would hold the balance. However, CAB Cakaran will have the option to increase its shareholding up to 30% in the next three years after the initial set-up, depending on its financial condition.
Barring any unforeseen circumstances and subject to all required approvals being obtained, the proposed private placement is expected to be completed by the second quarter.
Additionally, CAB said the gross proceeds would enable the company to partially repay the outstanding bankers’ acceptances which is expected to reduce CAB Group’s bank borrowings, thereby allowing the group to better manage its gearing level.
“On proforma basis, CAB’s bank borrowings are expected to reduce from RM193.13mil as at the latest audited Sept 30, 2015 to RM183.13mil while the gearing ratio is expected to reduce from 1.05 times to 0.74 times following the proposed placement.
“In addition, the net assets (NA) of the CAB group is expected to increase from RM184.17mil as at Sept 30, 2015 to RM245.89mil after the fund-raising exercise,” it said.
CAB is the largest poultry company in the northern region of Malaysia, is looking for more mergers and acquisition activities domestically to enlarge its current production capacity.
It targets to produce over five million birds per month next year.
The company currently has 10 breeder farms and 140 broiler farms nationwide. It now produces 4.2 million broiler birds per month, which is 20% higher than the 3.5 million birds it produced last year. The increase was mainly contributed by its newly acquired farm in Johor.
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