TSH Re­sources to take Ekowood pri­vate at 40 sen per share

The Sun (Malaysia) - - SPEAK UP -

PE­TAL­ING JAYA: Plan­ta­tion firm TSH Re­sources Bhd pro­poses to pri­va­tise its 67.46%-owned sub­sidiary Ekowood In­ter­na­tional Bhd for RM21.87 mil­lion or 40 sen per share.

The of­fer price of 40 sen per share rep­re­sents a pre­mium of 21 sen or 110.53% over its five-day vol­ume weighted av­er­age price up to Nov 28 of 19 sen.

Fol­low­ing the pri­vati­sa­tion of­fer, Ekowood shares rose 13 sen or 68.42% to close at 32 sen yes­ter­day, with some 4.88 mil­lion shares chang­ing hands. Shares of TSH, mean­while, closed one sen or 0.52% higher at RM1.92 on some 224,400 shares done.

The board of Ekowood is to re­vert to TSH no later than 5pm on Dec 19, 2016, with its de­ci­sion whether to put for­ward the pro­posed pri­vati­sa­tion, by way of a mem­bers’ scheme of ar­range­ment un­der Sec­tion 176 of the Com­pa­nies Act, 1965, to Ekowood share­hold­ers for con­sid­er­a­tion.

Ekowood said the board will de­lib­er­ate on the pro­posed pri­vati­sa­tion and de­cide on the next course of ac­tion.

Ekowood, a solid hard­wood floor­ing man­u­fac­turer, has reg­is­tered losses for the past seven fi­nan­cial years with an­nual losses af­ter tax rang­ing from about RM3.3 mil­lion to RM9.5 mil­lion. For FY2015, it recorded a loss of RM3.3 mil­lion.

In view of th­ese losses, TSH pro­poses to un­der­take a re­view of Ekowood’s busi­ness to im­prove its fi­nan­cial per­for­mance, which may re­sult in, among oth­ers, Ekowood’s op­er­a­tion be­ing re­struc­tured and/or new cap­i­tal be­ing in­jected.

TSH noted that the pro­posed pri­vati­sa­tion will fa­cil­i­tate such ra­tio­nal­i­sa­tion plan of Ekowood. It also presents an op­por­tu­nity for Ekowood share­hold­ers to un­lock their in­vest­ment at a sub­stan­tial pre­mium whilst con­tinue to par­tic­i­pate in the fu­ture growth of Ekowood through TSH.

TSH be­lieves the pro­posed pri­vati­sa­tion is not ex­pected to give rise of new risks to the group and that its prospects will not change ma­te­ri­ally.

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