PETALING JAYA: Minority shareholders in VERSATILE CREATIVE BHD (VCB), citing the exit offer of 50 sen per share was not reflective of the company’s true value, have rejected the company’s delisting plan.
After the EGM yesterday, the company announced on Bursa Malaysia that “save for the special resolution in relation to the proposed delisting, all the ordinary and special resolutions as set out have been passed by shareholders”.
“The minority shareholders rejected the delisting because they argued that Versatile is worth more than the current share price (which was taken to fix the exit offer price), taking into account its land and factory assets,” said a minority shareholder.
VCB has two pieces of industrial land – in Pandan Indah, Kuala Lumpur and Balakong, Selangor – which site its factory buildings. As at Dec 31, 2012, both assets were valued at a net book value of RM27.4mil while the company’s market capitalisation is RM55.32mil based on yesterday’s closing price of 50 sen per share.
VCB’s net asset per share is 64 sen for the financial year ending Dec 31, 2013 compared with 56 sen a year earlier.
However the company made a loss of RM3.16mil last year against a profit of RM2.14mil in 2012, with a negative cashflow of RM3.1mil as at end-2013. It was also in the red in financial years 2011, 2010 and 2008.
Apart from the land, VCB has a 6.2% stake in IRIS CORP Bhd. The value of this stake has doubled since November last year after Felda Investment Corp took a 26.7% stake in the technology company.
The net book value of this stake or 126.42 million Iris shares is RM62.58mil, based on Iris’ closing market price of 49.5 sen as at the latest practicable date, the shareholder said.
Iris and a few others launched a takeover of VCB in September last year and eventually ended up holding almost 90% of the company.
The parties that launched the takeover were Iris Healthcare Sdn Bhd, a subsidiary of Iris, Versatile Credit & Leasing Sdn Bhd, Iris group managing director and CEO Datuk Tan Say Jim and executive director Datuk Lee Kwee Hiang.
As VCB did not comply with the public spread, the offerers proposed to de-list the company at 50 sen, which has now been rejected by the minorities.
Before the offer to de-list came, VCB had in May proposed to dispose of its 6.2% interest in Iris to comply with the rules in the Companies Act. VCB cannot hold shares in its parent company, which is Iris.
As such VCB was to dispose of its interest in Iris within 12 months or longer, either in the open market or via direct trades. The group has said it would sell the Iris shares in stages so as to maximise the proceeds.
Given that the delisting plan was turned down by the minority shareholders, the offerers would now seek to either place out their own shares or issue new shares to the public, according to the shareholder.
VCB closed at 50 sen yesterday, up 1.5 sen on a trading volume of 57,500 shares.
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