Boustead Holdings Bhd has made a proposed voluntary offer to acquire the remaining 54.2 million shares or 43.5% of the issued and paid-up share capital in Kuala Sidim Bhd it does not already own for RM325mil or RM6 per share.
Affin Merchant Bank Bhd said in a statement on behalf of Boustead yesterday that the voluntary offer was made with a view to privatise Kuala Sidim.
Currently, Kuala Sidim does not meet with the shareholding spread requirement of the KLSE and the proposed voluntary offer was made with the intention to privatise the company and allow the holders an opportunity to exit at a premium to the market price prior to the offer.
It will also result in efficient deployment of the Boustead group's asset and capital base. The voluntary offer is expected to resolve the issue of non-compliance with the 25% public shareholding spread requirements of Kuala Sidim as per the listing requirements of the KLSE. It will also reduce the administrative costs associated with maintaining an illiquid listed subsidiary.
The voluntary offer will be financed by internally generated funds and/or borrowings of Boustead, subject to its financial position and any other relevant factors.
In the event Boustead decides to utilise bank borrowings to finance the voluntary offer, it will ensure that it has sufficient financial capability to repay the bank borrowings.
Barring unforeseen circumstances, the voluntary offer is expected to be completed by the 3rd quarter of this year.
As at March 7, Boustead holds 70.3 million shares in Kuala Sidim, representing 56.5% of its issued and paid-up share capital.
The present authorised share capital of Kuala Sidim is RM200mil comprising 200 million shares of which 124.5 million shares have been issued and fully paid-up.
The audited consolidated net tangible asset and profit after tax and minority interest of Kuala Sidim as at Dec 31, 2002, is RM1.1mil and RM39.2mil respectively.
Kuala Sidim is principally involved in the cultivation and processing of oil palm and rubber, bulking of edible oil, agricultural research and advisory services.
In a separate statement, Kuala Sidim said that it had received a notice of voluntary offer from Affin Merchant Bank on behalf of Boustead to acquire 54.2 million of its shares at RM6 each.
Trading in the shares of Boustead and Kuala Sidim was suspended yesterday but Is scheduled to resume today.
In another announcement, Bou-stead has proposed a 1-for-2 rights issue involving the issue of 149.17 million new ordinary shares of 50 sen each at an issue price of RM1.50 each.
The company has also proposed a 1-for-3 bonus issue of 149.17 million new 50 sen shares.
The proposed rights issue will raise up to RM220mil that Boustead plans to use to retire its short-term bank borrowings and for working capital purposes, including to defray costs incurred for the proposed capital raising exercise and voluntary offer.
The proposed bonus issue will enlarge the company's capital base whilst enabling existing shareholders to increase their participation in the company's equity in terms of number of shares held.
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