Big game, much money at play Investors turn to Sarawak Consolidated Industries as Zecon Bhd looks set for privatisation

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  • Friday, 19 Jul 2013

KUCHING: The proposed privatisation of Zecon Bhd has spurred investor interest in Sarawak Consolidated Industries Bhd (SCIB) as the two companies share common major shareholders.

Dawla Capital Sdn Bhd and Datuk Zainal Abidin Ahmad, together with Tan Sri Hamid Bugo and Zainurin Ahmad, have offered to pay Zecon’s minority shareholders 80 sen per share in cash amounting to RM35.78mil and entitled warrant shareholders 5 sen per warrant totalling RM1.14mil.

Zainal and Hamid are group managing director and non-executive chairman respectively of both Zecon and SCIB.

Zainal has direct and indirect equity interest via Hydrostar Sdn Bhd, Dawla Capital and Oricon Sdn Bhd of 21.67% (15.93 million shares) in SCIB.

Hamid has raised his direct stake in SCIB to 4.42% (3.25 million shares) with the latest acquisition of 17,800 units at 40 sen each in the open market on July 2. Hamid has indirect stake of 12.61% (9.28 million shares) via Pacific Unit Sdn Bhd, bringing his total holdings to 17.02%.

Hydrostar and Pacific Unit are the top two single largest shareholders of SCIB. Sarawak Economic Development Corporation is the third largest shareholder with a stake of 8.81%.

SCIB’s share price has been on an uptrend since the 13th general election, climbing from the 30-sen level to 53 sen yesterday, the highest in almost two years. The stock closed up 5 sen to 51 sen with a volume of 1.67 million shares.

Year-to-date, it has gained 20.5 sen or close to 70% from 2011’s close of 30.5 sen.

The group owns three factories in Pending Industrial Estate and Demak Laut Industrial Park here, which manufacture precast concrete products, like spun piles, pipes, reinforced concrete piles, box culverts and industrial building system (IBS) components, such as hollow-core slabs, precast beams and columes as well as roofing tiles.

According to Hamid, the group is investing about RM6mil in two new production lines to raise the production capacity of precast concrete products by 30,000 tonnes to 114,000 tonnes a year. The new lines are expected to be commissioned by January next year.

Additionally, the group is investing RM1.3mil in a new production line for IBS to boost manufacturing capacity.

Last year, the group produced more than 140,000 tonnes of precast concrete products and IBS components, an increase of 40.5% over 2011.

SCIB, a Sarawak pioneer in IBS, group’s current order book stands at about RM46mil, with the majority of the contracts in hand to be recognised in the next 12 months.

Meanwhile, Zecon share price is hovering around 74 sen after touching a high of 76.5 sen on Tuesday following the announcement of the company’s privatisation via a selective capital reduction and repayment. The warrants are trading around 9 sen.

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