Gnanalingam offers to take over Maika at 80 sen per share

KUALA LUMPUR: Tan Sri G. Gnanalingam is offering to take over Maika Holdings Bhd at 80 sen per share, which he said reflected the original investment value of RM1 per share after taking into account the 25 million bonus shares issued over the years.

Gnanalingam said the offer price was fair considering the Maika saga had been a long standing issue that went back over 26 years.

Maika had originally issued 100 million RM1 shares in 1984.

Also, he said the offer to take over Maika at RM106mil was higher than the company’s value of RM85mil.

“Maika basically has two assets – Oriental Capital Assurance (OCA) valued at RM99mil based on Maika’s 74.6% stake, and a piece of land worth RM10mil – and a cash balance of RM6mil, which add up to RM115mil.

“Meanwhile, its liabilities are a commercial loan of RM19mil and RM11mil to the government securities fund,” he told a press conference yesterday.

On comments that the “dollar-for-dollar” offer did not reflect the return on investment of the shares, Gnanalingam said the intention was to help shareholders get back their money at the original investment value.

“This is only an offer and there are many different views on the subject. Some previously sold their shares at 30 sen to 50 sen each and some are still hoping to get dividends from their investments.

“Notwithstanding the above, we thought a fair system would be to pay all the shareholders what they had invested even though the company is valued at RM85mil.

“It is targeted that the share acquisition would start on May 1 and we need about three months to collect all the shares,” he said.

Gnanalingam, who is executive chairman of Westports Malaysia, has set up a company, G Team Resources, with a paid-up capital of RM1.5mil, as a special-purpose vehicle for the takeover.

G Team has already acquired a 12% stake in Maika from members of the management team.

G Team is supported by a Cabinet committee set up by the Prime Minister which includes HSS Integrated executive director Datuk Kuna Sitthampalan, Bank Negara and Petroliam Nasional Bhd director Datuk N. Sadasivan, former Mida director-general Datuk R. Karunakaran and Prime Minister’s Department special officer Ravin Ponniah.

“They will become trustees of Maika when we take over the company,” Gnanalingam said.

On his plans post-takeover, Gnanalingam said he would liquidate the two assets, clear the liabilities and eventually close down Maika.

“On paper, from the takeover offer of RM106mil minus the company’s value of RM85mil, I will lose around RM21mil. But, the land’s value could increase if it is further developed into a housing area for instance.

“Post-takeover, we will try our best to reduce the losses or to break even within six months to a year. But we will also find other ways for Indians to invest,” he said.

However, all these plans and figures are without due diligence as, according to Gnanalingam, he had not intended to break the news but the recent frenzy media focus on Maika had prompted him to come forward.

“I am actually not ready to go into the details. I still need the bankers to agree on the pricing. You must take this as a preliminary proposal.

“For example, we first need to amicably resolve the injunction by NESA Cooperative on the sale of OCA which is also subject to Bank Negara approval,” he said.

On other anticipated problems, Gnanalingam said there would be cases of shareholders who had passed away and others who had lost their share certificates.

“It will be difficult to determine the rightful shareholders and we need to find a method to resolve this,” he said. For latest Bursa Malaysia indices, charts and other information click here

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