PETALING JAYA: Government-linked private equity fund management company Ekuinas Nasional Bhd has emerged as a substantial shareholder in Konsortium Logistik Bhd after it entered into a share sale agreement yesterday to acquire a 56.5% controlling stake, or 133.26 million shares, in Konsortium for a total consideration of RM206.6mil.
Accordingly, a mandatory general offer for the remaining shares of Konsortium has been triggered, and will be extended to other shareholders of the company.
However, at RM1.55 a share, the offer price for Konsortium’s shares did not ascribe any significant premium – a fact to which Ekuinas’ management acknowledged – and hence, Ekuinas did not expect to see an encouraging acceptance of its offer by other shareholders in Konsortium, nor would it actively pursue to further increase its stake in the logistic solutions provider.
“We are happy with the stake that we have in Konsortium, and we are just as happy to keep the company listed as it is,” Ekuinas chief executive officer Datuk Abdul Rahman Ahmad told a press briefing yesterday.
Trading of Konsortium’s shares was halted 15 minutes before closing yesterday. Its last quoted price was RM1.52 per share. Its trading will resume today.
Ekuinas revealed that the 56.5% stake in Konsortium was acquired from Dream Hectares Sdn Bhd, executive vice-president and longstanding senior director Loo Hooi Keat, and through a market-placement exercise undertaken by several security houses.
The acquisition of a majority stake in Konsortium represented Ekuinas’ third direct investment after Alliance Cosmetics Group and Tanjung Offshore Bhd.
“Our proposed investment in Konsortium provides an attractive entry for Ekuinas into the sizeable logistics sector and an opportunity to increase bumiputera participation in a sector, which is instrumental in driving the nation’s growth,” Ekuinas chairman Raja Tan Sri Arshad Raja Tun Uda said.
The Malaysian logistics industry was presently valued at approximately RM55bil, or around 7% of the country’s gross domestic product (GDP). With an estimated GDP growth rate of around 6% to 8% over the next five years, the logistic industry was expected to grow correspondingly at a compounded annual growth rate of 9% up to 2015.
Under the 10th Malaysia Plan (10MP), Ekuinas has been given an allocation of RM4.5bil by the Government, effectively raising its fund size to RM5bil through 2015, to promote equitable and sustainable bumiputera economic participation via the creation of next generation of leading companies.
“We selected Konsortium into our investment stable because of its leading position in the overall logistics market in Malaysia, and its strong presence in the automotive, coal shipping and haulage businesses which collectively contribute to around 70% of the company’s revenue,” Abdul Rahman explained, adding that Ekuinas’ minimum target was for a 12% internal rate of return (IRR) for its investment.
Its aspirational target, though, had been set at 20% IRR.
In his presentation, Abdul Rahman revealed that expanding into new related logistics segments was one of Ekuinas’ plans for Konsortium in the near future.
In addition, Ekuinas would focus on enhancing Konsortium’s operational efficiencies to drive cost savings and improve margins, as well as seeking to grow revenue and earnings through aggressive marketing and acquisition of new clients. Ekuinas also planned to review Konsortium’s businesses and assets to facilitate optimal utilisation of resources to unlock value and enhance future growth of the group.
Konsortium’s revenue and net profit for the financial year ended Dec 31, 2009 (FY09), stood at RM239.1mil and RM23.3mil, compared with its revenue and net profit of RM260.4mil and RM21.3mil respectively in FY08. For the first half of 2010, Konsortium registered RM151.8mil in revenue and a net profit of RM22.8mil. Its net tangible asset was presently valued at RM1.36 per share.
For latest Bursa Malaysia indices, charts and other information click here
Did you find this article insightful?