Mi­nor­ity Share­holder Watch­dog Group is not op­ti­mistic as com­pany has failed to find ‘white knight’

New Straits Times - - Business -


ACASH ac­qui­si­tion or par­tial cash and share is­sue in the form of a re­verse takeover may en­able Premier Nalfin Bhd to keep its listing on Bursa Malaysia.

How­ever, the Mi­nor­ity Share­holder Watch­dog Group (MSWG) does not see this hap­pen­ing as the com­pany, which no longer has a core busi­ness af­ter sell­ing off its down­stream palm oil op­er­a­tions, had failed to find a “white knight” to res­cue it.

Premier Nalfin, which has been des­ig­nated as a Prac­tice Note 16 (PN16) com­pany (cash com­pany) since July 2011, had been look­ing for suit­able busi­ness op­por­tu­ni­ties to reg­u­larise its con­di­tion.

“The busi­ness must not only be able to cre­ate value in the in­ter­ests of the com­pany, but also the val­u­a­tion must be sat­is­fac­tory.

“If a suit­able busi­ness can­not be iden­ti­fied, the com­pany will have to re­sort to cash dis­tri­bu­tion, be delisted and ul­ti­mately carry out vol­un­tary liq­ui­da­tion,” MSWG gen­eral man­ager Lya Rah­man told NST Busi­ness.

She said it may be detri­men­tal to the in­ter­ests of the mi­nor­ity share­hold­ers if the com­pany dragged this too long.

The com­pany will not have value cre­ation and may suf­fer leak­ages through pos­si­ble hefty re­mu­ner­a­tion paid to di­rec­tors and other ex­penses to keep the com­pany afloat.

“With the pas­sage of time, the resid­ual value of the com­pany will grad­u­ally di­min­ish,” said Lya.

In May, Bursa Malaysia had in­formed Premier Nalfin of its po­ten­tial delist­ing and asked the com­pany to com­ply with the an­nounce­ment of its cash dis­tri­bu­tion and the ac­tual dis­tri­bu­tion with the time­line given.

“Bursa might have felt that suf­fi­cient time since July 2011 have been given for the com­pany to reg­u­larise its con­di­tion.

“The lat­est pro­posed re­struc­tur­ing scheme sub­mit­ted by the com­pany on January 29 last year was also un­suc­cess­ful and the com­pany had with­drawn its ap­pli­ca­tion,” she said.

MSWG be­lieves cash dis­tri­bu­tion would be car­ried out and the com­pany would be delisted as it is still un­able to come up with a suc­cess­ful reg­u­lar­i­sa­tion plan.

Ac­cord­ing to the com­pany’s ex­change fil­ing, Premier Nalfin had pro­posed to un­der­take a pro­posed cap­i­tal re­duc­tion and re­pay­ment ex­er­cise, which in­volves a cash dis­tri­bu­tion of RM101.1 mil­lion on the ba­sis of 30 sen for each or­di­nary share held by share­hold­ers.

Mean­while, a source in the com­pany said once the is­sue was re­solved, the RM117.95 mil­lion gained from Premier Nalfin’s core busi­ness dis­posal — mi­nus all the ex­penses — would be re­turned to share­hold­ers.

“We will pay twice. Af­ter the first pay­ment has been made, there will be a high pos­si­bil­ity that the com­pany could be delisted.

“This is what nor­mally hap­pens. The board doesn’t want to hold the money as they feel that they should re­turn all the money to the share­hold­ers as soon as pos­si­ble,” he said.

He said the com­pany was guided by Bursa’s listing re­quire­ments and prin­ci­pal ad­viser.

“Once we delist, we will be­come a pri­vate com­pany with lit­tle money. The money would be paid to the share­hold­ers,” he said.

Lya said the mi­nor­ity share­hold­ers should be con­cerned as they will not be able to eas­ily trade their shares once the com­pany was delisted.

“There would be un­cer­tainty in the com­pany’s direction af­ter the cash dis­tri­bu­tion. If there is a vol­un­tary liq­ui­da­tion of the com­pany af­ter the cash dis­tri­bu­tion, mi­nor­ity share­hold­ers would be con­cerned whether the sub­se­quent dis­tri­bu­tion of sur­plus, if any, to­gether with the ear­lier cash dis­tri­bu­tion would be more than their in­vest­ment cost so that they would not lose out,” she said.

Lya cited a sim­i­lar case, the delist­ing of Abric Bhd, on March 3, when the com­pany failed to sub­mit its reg­u­lar­i­sa­tion plan by the dead­line. The com­pany had on March 16 last year car­ried out cash dis­tri­bu­tion and delist­ing pro­ce­dures.

MSWG gen­eral man­ager Lya Rah­man

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