JF Apex and Mercury Securities merger in limbo


PETALING JAYA: APEX EQUITY HOLDINGS BHD may have cleared a major hurdle for its proposed merger with Mercury Securities Sdn Bhd with a slim majority of shareholders voting in favour, but obstacles are coming back to haunt it.

Pinerains Sdn Bhd and Concrete Parade Sdn Bhd have each filed a notice of application seeking for the vesting order obtained by JF Apex Securities Bhd and Mercury Securities on July 1 to be set aside.

And in the case of Pinerain’s application, it is seeking that the order be stayed, pending the disposal of its suit against Apex, JF Apex, Alliance Investment Bank Bhd and the existing directors of Apex, where it is seeking a declaration that the proposed merger between JF Apex and Mercury Securities and the private placement be invalidated.

Both the resolutions of the merger and the proposed private placement of 20 million new ordinary shares, which would represent around 6.2% of Apex’s enlarged issued share capital post-merger and placement, were given the green light at Apex’s EGM on June 19.The Kuala Lumpur High Court has fixed the hearing for the applications today.

Pinerains holds 4.69% in Apex, while Concrete Parade holds 4.93%. Pinerains is said to be linked to Lim Siew Kim – the daughter of the late Genting Group tycoon Tan Sri Lim Goh Tong – who personally owns 2.79% in Apex.

Lim Beng Guan, who holds 95% in Concrete Parade, is said to be an associate of Siew Kim.

On Wednesday, Concrete Parade appealed the High Court’s June 18 dismissal of its application to restrain ACE Investment Bank Ltd from voting or exercising any of the rights attached to its shares in Apex, pending compliance with the directions from the Securities Commision (SC).

The court has fixed case management for Aug 26.

Apex had entered into an agreement to merge with Mercury Securities in September last year, in what is deemed to be a move to address the issue of ACE Investment’s 25% stake in Apex.

The SC approved the merger but on the condition that ACE Investment exits Apex and fully disposes of its shareholdings within six months of the merger’s completion date.

ACE Investment also has to cease being on Apex’s board in the immediate term upon the completion of the exercise, and also sell down its shareholding in Apex to below 15% within a month from the date of completion.

Mercury Securities will hold about 31% of the merged entity and the dilution in equity will see ACE Investment’s stake dropping to 15.71% post-merger due to the new issue of shares.


   

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