AEI Corp buys back shares, sells old business to former CEO as it shifts to LNG buying

Precision component extraction and manufacturing company AEI Corp recently bought back some of its shares from the market. On Nov 11, it purchased about 176,200 shares at 69.1 cents each, for a total consideration of $122,063.

The next day, AEI purchased 73,300 shares at 70.6 cents each, which amounted to $51,933. And on Nov 13, AEI bought 171,900 shares for 73 cents each, amounting to $125,876. Following these buyback exercises, its issued shares excluding treasury shares came up to about 56.3 million.

According to a Nov 11 announcement, the company’s CEO and executive director Ian Tan Chu En as well as chief financial officer and company secretary Sinta Muchtar, who is also Tan’s wife, had resigned and ceased their roles on Nov 11. The couple cited “to pursue own personal interest” as the reason.

On Nov 10, AEI announced it would be disposing of its business and liabilities in the manufacture, import and export of aluminium extrusion sections, metal materials and other related products to 3PLE1 Holdings, an entity held by Tan and Muchtar, for $4 million.

According to AEI, the outlook for its core electronics and precision engineering segment is expected to be lacklustre. Thus, this disposal is part of its restructuring exercise and business transition into new areas to enhance income streams. This disposal will also help the company streamline its operations and facilitate its diversification into new businesses.

In June, the company signed a “framework” agreement with Beijing-based Zhongneng International Gas Co to collaborate in the purchase of liquefied natural gas. Under terms of the agreement, AEI will be appointed the purchasing agent of Zhongneng to procure at least six million tonnes of LNG from international suppliers.

Additionally, in line with AEI’s business restructuring, it has changed the name of its wholly-owned subsidiary AEI Engineering to AEI Trading and Investments.

On Oct 9, Ho Kee, one of the AEI’s substantial shareholders, acquired 42,800 shares in the company for $27,724, bringing his direct interest in AEI from 5.04% to 5.11%.

For 1HFY2019, the company managed to narrow its losses by 24.6% to $2.4 million, from $3.2 million in the same period a year ago. This was despite a 15.9% y-o-y drop in revenue to $4.1 million.

On Nov 13, shares in AEI surged some 20.5%, or 15 cents, to close at 88 cents. The shares jumped just about an hour before market close, sparking a query from the Singapore Exchange. The company responded that it was not aware of any related information not previously announced and confirmed that it is in compliance with the listing rules. This is the highest the counter has traded since May 14, 2018, when it traded at 95 cents. On Nov 14, a further 51,000 shares were purchased at 77 cents each, amounting to $39,392.

Separately, plastic and resin trader Intraco Trading on Oct 18 announced the completion of a put option exercise by vendors Soh Yong Poon and Soh Ying Sin, in respect of shares in building and construction company KA Group Holdings (KAGH).

Intraco acquired the option shares, which represent a 20% stake in KAGH, for $4.8 million, bringing its total issued share capital in KAGH to 90%.

Following the announcement on its increased stake in KAGH, Intraco began buying back its shares. On Oct 21, it acquired 2,200 shares from the market for $533, averaging 23 cents each. Including this purchase, Intraco has bought back 275,500 of its shares in 11 separate exercises since Oct 21, representing a 0.27% stake, and spent a total of $72,463.

Its most recent share buyback was on Nov 14, when it acquired 50,000 shares for $14,048, or 28 cents each. E