Bonia on overseas expansion drive

PETALING JAYA: While the major shareholders are maintaining that they do not intend to privatise Bonia Corp Bhd, the leatherware, shoes and apparel company will focus on an aggressive overseas expansion drive.

Group managing director Albert Chiang Heng Kieng told StarBiz that the expansion in Indonesia and Vietnam, after reaching critical mass, would keep the company busy for the next three to five years.

“We started with joint ventures with local parties in these countries, and now we are expanding our presence on our own. We are looking at setting up our own retail stores there and also seek opportunities in the Middle East,” he said.

He said although the retail market was going through challenging times, the family would continue to grow the business.

Bonia, controlled by the Chiang family, was in the news recently after the family and affiliates triggered a mandatory general offer (MGO) following Freeway Team Sdn Bhd’s purchase of 35 million shares amounting to a 17.38% block in an off-market deal at RM2.04 per share. Freeway Team is aligned to executive chairman Chiang Sang Sem and his son Chiang Fong Yee.

That ultimately raised the family’s stake to 48.25% from 31.98%. Together with the other parties aligned to the family, they currently hold 50.17% of Bonia shares, hence they are offering to buy up the remaining 49.83% of the shares they do not own.

“We have no intention to privatise the company, the acquisition from friendly parties is just to give the family the comfort of having a larger controlling stake, since most of the second generation of the family are now working for the company,” he said.

To be noted, the takeover offer is at a significant 20.9% discount to its last traded share price of RM2.58 before the offer was made.

To this end, Albert said at an offer price of RM2.04, it was about 10 times the price to

earnings ratio of Bonia, and prior to the fluctuation in share price, Bonia was traded at the RM2.20 range.

Despite making the offer, the offerers said, in its circular to shareholders, that they intended to maintain Bonia’s listing status. If the joint offerors (Freeway Team and parties) reached a 90% acceptance level for the remaining shares it did not own at the time of making the offer, the joint offerers could decide to invoke the compulsory acquisition provision in the Capital Markets and Services Act, and take steps to privatise the company.

Founded by Sang Sem in 1974, Bonia began in the business of designing, manufacturing and wholesaling of leather goods in Singapore. For the first half to June 30, Bonia’s net profit was up 7.13% to RM45.64mil.