TH Heavy soars
on stake buy by Quek-related parties
Published: Wednesday May 8, 2013 MYT 12:00:00 AM BY JOHN LOH
PETALING JAYA: Parties linked to banking billionaire Tan Sri Quek Leng Chan have bought a sizeable stake in mid-cap fabricator TH Heavy Engineering Bhd (THHE) through a private placement announced on Monday, sending its stock up a sharp 15% to 53.5 sen.
Some 39.6 million shares changed hands at prices ranging from 47 sen to 54.5 sen, making it the fifth most active counter across Bursa Malaysia yesterday. The stock has soared 24% from a trough of 43 sen on May 2.
It is not yet clear what drove Quek to take up the placement at 45 sen a share but THHE is seen to be on the mend, having recently exited its PN17 status.
THHE managing director and chief executive officer Nor Badli Mohd Alias could not be reached for comment at press time.
The firm, which fabricates offshore steel structures for the oil and gas (O&G) industry, had billed 2012 as a “turnaround year”. It posted earnings of RM24.2mil on a revenue of the RM190mil last year, reversing 2011’s dismal RM11.4mil net loss and RM23mil turnover.
The group is also said to be eyeing a risk service contract with Petroliam Nasional Bhd for marginal oilfields as well as the West Sepat gas field.
THHE is currently expanding its fabrication yard in Pulau Indah, Port Klang, by nearly five times to 104ha from 23.01ha.
It also has fabrication yards in Pasir Gudang, Johor, with a capacity of 129,000 tonnes per annum, making THHE the country’s largest fabricator in terms of yard size and capacity.
The company, formerly known as Ramunia Holdings Bhd, told the stock exchange two days ago that it would place out 92.8 million new shares, or 10% of its existing share capital, to GuoLine Capital Ltd and Quek Kon Sean.
GuoLine is a subsidiary of Hong Leong Co (M) Bhd, while Kon Sean is Quek’s youngest son and the only one of his three children to have ventured into banking.
The London School of Economics-educated 33-year-old started his career as an analyst with Goldman Sachs, followed by another year-long stint as a debt market analyst with HSBC, both in London, according to public records.
Thereafter, he joined the family business and assumed directorships in several of his father’s listed entities, including Hong Leong Financial Group Bhd, Hong Leong Capital Bhd (HLCap) and Hong Leong Bank Bhd.
In its filing, THHE said the placement shares were priced at a 0.64% discount to the company’s five-day volume weighted average market price up to May 6. GuoLine and Kon Sean will subscribe for 65 million shares and 27.8 million shares, respectively.
They would effectively hold 9% of THHE’s enlarged share base of 1.02 billion shares once the placement, which is set to raise gross proceeds of RM41.8mil for working capital and potential investments, are completed by June.
Following the exercise, THHE’s largest shareholder, pilgrim fund Lembaga Tabung Haji, will see its interest diluted to 29.09% from 32%.
This is not the first time Leng Chan has dabbled in O&G. He had acquired stakes in Kencana Petroleum Bhd, Petra Perdana Bhd (since renamed Perdana Petroleum Bhd) and Singapore-listed subsea and drilling services providerMermaid Marine Public Co Ltd during the latter’s listing in 2007 together with Datuk Mokhzani Mahathir, who is now chairman of SapuraKencana Petroleum Bhd.
The 70-year-old Quek, at one time Kencana’s No. 2 shareholders, ceased to be a substantial owner of the fabricator in August 2009. He had bought into Kencana and Petra Perdana when they were newly-listed and riding high.
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