TSH said in an announcement to Bursa Malaysia yesterday that it would continue to focus on oil palm planting programmes in Indonesia and Malaysia
KUALA LUMPUR: Shares of loss-making Ekowood International Bhd surged to a high of 36 sen on Wednesday afternoon after its major shareholder TSH Resources Bhd
proposed to take it private.
At 3.19pm, Ekowood was up 14.5 sen to 33.5 sen with 2.46 million shares done. TSH, which owns 67.46% of Ekowwod, rose one sen to RM1.92.
The FBM KLCI rose 0.27 of a point or 0.02% to 1,627.20. Turnover was 1.02 billion shares valued at RM863.03mil. Again, the broader market was weaker, with 517 losers to 193 gainers while 314 counters were unchanged.
TSH, which is involved in plantations, proposed to take Ekowood private via the issuance of new TSH shares.
TSH had on Wednesday submitted a formal plan to Ekowood for the proposed privatisation and the latter has to revert by Dec 19 on whether to put forward the plan to the shareholders.
“TSH shall pay 40 sen for each scheme share which shall be satisfied entirely via the issuance of new ordinary shares of 50 sen each in TSH at an issue price of RM1.92,” it said.
Based on the 54.67 million Ekowood shares held by the scheme shareholders at 32.54% of the paid-up of Ekowood, the proposed privatisation is RM21.87mil which shall be satisfied via the issuance of up to 11.39 million new TSH shares.
“The proposed privatisation is not expected to give rise of new risks which TSH is not already exposed to as Ekowood is currently a 67.46% owned subsidiary of TSH. The prospect of TSH Group is also not expected to change materially as a consequence of the proposed privatisation,” it said.
TSH said Ekowood and its subsidiaries have registered losses for the past seven financial years with annual losses after tax ranging from about RM3.3mil to RM9.5mil. For FY2015, Ekowood Group recorded a loss RM3.3mil.
“In view of these losses, TSH proposes to undertake a review of Ekowood Group’s business to improve its financial performance. This may result in among others, Ekowood Group’s operation being restructured and/or new capital being injected. The proposed privatisation will facilitate such rationalisation plan of Ekowood Group,” it said.
TSH added the proposed privatisation would enable the scheme Shareholders to unlock their investment in Ekowood at a substantial premium whilst continue to participate in the future growth of Ekowood through TSH.
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