Encorp in spotlight

Felda chairman Tan Sri Shahrir Abdul Samad(pic) said he hoped to see changes in Encorp with a view that the property group further improves on its performance and returns.

KUALA LUMPUR: After getting strategic shareholders to come into Iris Corp Bhd, Felda has shifted its focus to improving the performance of Encorp Bhd and Barakah Offshore Petroleum Bhd.

Felda chairman Tan Sri Shahrir Abdul Samad said he hoped to see changes in Encorp with a view that the property group further improves on its performance and returns.

“We are also open to strategic shareholders that are able to add value to the company,” he added.

Felda owns 70.82% stake in Encorp through its subsidiary Felda Investment Corp Sdn Bhd (FIC). FIC also has a 8.9% stake in oil and gas company Barakah Offshore Petroleum.

Analysts had said Encorp shares were too tightly held by FIC. It was reported that Felda paid RM1.55 per share or RM306.11mil for the block in 2014.

As of last Friday, Encorp share price was traded at 69 sen with a market capitalisation of RM192.3mil.

The group was profitable in FY2016, registering a net profit of RM28.53mil on the back of revenue of RM360.82mil.

According to Shahrir, Felda was also making good progress with the major restructuring of FIC.

It is also undertaking assets reorganisation of FIC’s investments in Iris Corp, an IT solution provider company.

FIC has a 19.39% stake in Iris.

Shahrir noted that nine new credible board members have been appointed to oversee the full operations of FIC group.

FIC is principally involved in property development, hospitality and other strategic investments.

He said Iris and Encorp would see similar changes in its board of directors and management team line-up.

Since taking over the helm of Felda in January, Shahrir has ordered the resignation of the entire FIC board to better facilitate with the reorganisation of the company.

“The new FIC board will have the mandate to re-assess all these investments including assets which have not been able to generate good returns.

“We also have a view to sell off some of these non-performing investments,” Shahrir told StarBiz.

For loss-making Iris, the restructuring came about with the emergence of two new influential directors, Datuk Paul Poh and Datuk Rozabil Abdul Rahman via the completion of a private share placement this month.

In June, Iris had placed out 224,718,405 new shares at 14 sen each to raise proceeds of RM31.46mil.

Based on the recent announcement, Poh and Rozabil indirectly own 224,718,405 shares in the company, which is the entire number of shares issued during the private placement.

Sources pointed out that both Poh and Rozabil took up the entire placement shares via investment vehicle Caprice Development Sdn Bhd.

Iris shares were trading at 26 sen to 28 sen when FIC bought it for over RM130mil. They are currently trading at 17 sen.

Last month, Iris wrote down RM161mil for its non-core businesses and reported a loss of RM292mil for its fourth quarter ended March 31, 2017.

In February, Shahril was also reported as saying that Felda plans to sell several of its properties in London. It has one four-star hotel and two student hostels there.

In Malaysia, it owned Merdeka Place in Kuching and a hotel in Port Dickson.

On Felda Global Ventures Holdings Bhd (FGV) acting chairman Tan Sri Sulaiman Mahbob’s recent remark that FGV is revisiting some of its past investments and considering whether to dispose of its underperforming assets, Shahrir said Felda would likely buy back some of these non-core assets owned by FGV.

“Why not, since some of these assets belong to Felda prior to the FGV listing?” he said without identifying the assets.

Sulaiman had said that FGV is re-evaluating its past acquisitions in plantations and other non-core businesses which do not benefit the group in the long run as their returns were not up to the mark.