Silk declares special and interim dividends

PETALING JAYA: Oil and gas (O&G) firm Silk Holdings Bhd, which recently proposed a name change to Marine & General Bhd, has declared a special dividend of 10 sen per share and a five-sen interim dividend per share for the financial year ending Dec 31, 2017 (FY17).

This translates to a 31.25% yield based on yesterday’s closing price of 48 sen.

Recall that Silk had disposed of its highway business, notably the Silk Highway, to Permodalan Nasional Bhd earlier this year for RM380mil. The deal was completed on April 28, leaving Silk with RM365.32mil in its coffers.

The company had previously mentioned that it planned to distribute a cash dividend of 10 sen per share, or equivalent to RM70.15mil, to its shareholders and allocate some RM200mil to restore its O&G and marine businesses.

After its 20th AGM and EGM yesterday, Silk shareholders also approved a dividend reinvestment plan (DRP), awarding shareholders an option to buy new shares in the company using their dividend proceeds.

Silk said its board of directors had decided that the DRP was applicable to the entire portion of the dividends.

Apart from this, shareholders also approved a share buy-back authority to purchase up to 10% of the issued share capital of Silk.

Silk, which has a market capitalisation of RM336.74mil, also locked the issue price of the new shares under the DRP at 32 sen per share. This represents a 9.25% discount to the adjusted five-day volume-weighted average market price (VWAP) of the shares immediately prior to the price-fixing date.

“The five-day VWAP of the shares immediately prior to the price-fixing date of RM0.5026 adjusted for the dividends per share of 15 sen is RM0.3526,” Silk said.

The company will be submitting an application to the stock exchange for the listing of and quotation for the new shares under the DRP.

Meanwhile, after the AGM and EGM, shareholders were briefed on the tough operating landscape that resulted in cutbacks in O&G exploration and production, operating conditions for the marine logistics upstream division for FY16.

Silk explained that its marine logistics downstream division, which started operations in June 2016, had incurred pre-operating costs as well as costs related to mandatory dry-dockings for the vessels bought by the division, con-

tributing to a net loss in FY16.

Noteworthy is that Silk has not been performing well as its net loss- es widened to RM16.07mil from RM7.7mil for the first quarter ended March 31, 2017, while revenue dropped 34.5% to RM30.7mil.

This was mainly caused by the upstream O&G business, which recorded higher pre-tax losses of RM35.7mil during the period under review.

In FY16, Silk made losses of RM74.39mil on the back of RM303.92mil in revenue.

Silk’s shares closed down two sen or 4.95% to 48 sen yesterday, with 11.98 million shares being traded.