PETALING JAYA: Pelikan International Corp Bhd is transferring RM1.05bil worth of assets worldwide to its 71.32%-owned Germany-listed subsidiary Herlitz AG at a discount, as the struggling stationery maker seeks to boost current stock valuations and raise fresh funding for future growth.
The assets, which involve the group’s existing operations in Japan, Europe, the Middle East and the Americas, generated a turnover of RM1.015bil in the financial year ended Dec 31, 2013.
Herlitz will issue 231.2 million new shares in the company to Pelikan for one euro each for the assets. The exercise also involves an issuance of 32.9 million new Herlitz shares at one euro and an offer for sale of up to 60 million Herlitz shares at a minimum price of one euro each.
The proposed new share issue and offer for sale will raise 92.9 million euros (RM390mil) for the group.
“The consolidation of the group’s stationery business into Herlitz will set a strong platform for us to grow this core business,’’ president and chief executive officer Loo Hooi Keat said in a statement.
Herlitz will be renamed Pelikan AG after the exercise.
An independent valuation done by PricewaterhouseCoopers (PwC) Berlin valued the assets at 249.2 million euros (RM1.05bil).
“The discount given will make it attractive for investors to subscribe to the cash issue and offer for sale for further upside in the post-listing valuations,” Peilkan said in the statement.
The valuation also indicated a 62% premium over Pelikan’s current market cap of RM647mil.
Kenanga Research analyst Soong Wei Siang viewed the assessment positively as Pelikan would be able to justify the valuation for its share placement exercise later.
“With the audit report, the company is one step closer to the completion of the corporate exercise, which was first announced in July,” he said.
Pelikan, Soong said, may get RM252mil from the sale of Herlitz shares, adding that Pelikan would eventually reduce its stake in Herlitz to 63% after the consolidation exercise.
“Given the good valuation, the company could ask for higher valuations during its book-building process,” Soong added.
Pelikan had intended to raise a minimum 110 million euros (RM462mil) in its July announcement, which is 15.55% higher than the 92.9 million euros announced yesterday.