PETALING JAYA: In a move that came as a surprise, Tan Sri Mohd Nadzmi Mohd Salleh strengthened his hold on bus operator Konsortium Transnasional Bhd (KTB) by acquiring a further 15% in the company.
This will increase his stake to almost 75% in KTB, the maximum that he can acquire without having to trigger a mandatory general offer.
In an announcement yesterday, KTB said Nadicorp Holdings Sdn Bhd acquired 64 million shares (or 15.89%) in the company from Affin Investment Bank at 62.5 sen each for RM40mil.
The off-market deal is worth more than double KTB’s closing share price of 30.5 sen on Monday.
Nadzmi is currently the director and executive chairman of Kumpulan Kenderaan Malaysia and Nadicorp respectively.
When contacted, Nadzmi said his acquisition was part of a move to recapitalise KTB.
“My purchase shows that I have confidence in the company. I know it’s a very tough business but economies of scale are very important. I have the necessary scale and experience to ensure that costs are contained.
“In this business, you need to replace buses on a periodic basis and keep cost down. It is a regulated business and that is why many of the smaller operators have closed down. In an environment where fuel costs and wages keep going up, you need economies of scale to be profitable.”
Affin ended up with a stake in KTB following a corporate exercise in the company which was formerly known as Park May.
In December 2003, Park May had announced a comprehensive restructuring scheme involving the exchange of its shares with new shares in KTB.
KTB’s share price closed up eight sen to 38.5 sen yesterday, with 73.07 million shares traded.
Nadicorp, which is already a substantial shareholder in bus operator KTB with a 9.14% stake prior to the transaction, now has 100.8 million shares or 25.03%, after acquiring the 64 million shares.
According to KTB’s annual report, Nadzmi, who is KTB chairman and managing director, owns 4.78 million shares or a 1.19% stake in KTB.
Kumpulan Kenderaan Malaysia Bhd, which is KTB’s largest shareholder, owns 129.32 million shares or a 32.11% stake in the company.
Nadicorp has five main business units, namely transportation, manufacturing, property and plantation, defence and other support services.
Nadzmi was appointed KTB chairman and managing director in September 2005.
It was reported that KTB’s net profit for its second quarter ended June 30 had plunged 79% to RM2.71mil from RM12.65mil previously.
The higher profit in the previous corresponding period was due to disposal of properties. Revenue, meanwhile, slipped to RM56.61mil from RM57.09mil a year earlier.
On its outlook, KTB had said in its notes accompanying its second quarter results that the transportation sector was highly sensitive to the fluctuation of operational costs such as fuel, tyres and spare parts.
“The group will continue with its effort to maintain its quality market share and reduce costs,” it said.