Friday 29 Mar 2024
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KUALA LUMPUR: Shares of Goh Ban Huat Bhd (GBH) plummeted as much as 20% yesterday, making it the second biggest loser on Bursa Malaysia, after a RM632 million deal to acquire oil and gas (O&G) services provider Dynac Sdn Bhd fell through.

The proposed acquisition, which was to be to be satisfied via a combination of RM210 million cash and the remaining RM422 million via the issuance of new GBH shares to Dynac’s vendors namely Datuk Abdul Rahman Mohamed Shariff and Normala Mohd Sharif at an issue price of RM2 each, would have seen the latter ending up as the controlling shareholder in GBH. This would have transformed the ceramic maker into an oil and gas (O&G) play.

In a filing with Bursa Malaysia yesterday, GBH said the parties had mutually agreed to terminate the memorandum of agreement (MoA) signed on July 2 this year for the acquisition by GBH of the entire issued capital of Dynac.

GBH did not give a reason for the termination of the MoA, but talk is that it was due to Dynac wanting to have its own initial public offering.

GBH shares finished down by 17.78% or 40 sen at RM1.85 on 1.06 million shares traded. GBH, which is controlled by tycoon Tan Sri Robert Tan Hua Choon, had proposed to raise the cash for the Dynac purchase, primarily by selling land in Segambut to Keladi Maju Bhd, another listed company in which Tan is also a substantial shareholder, for RM192 million.

The Edge weekly had on Aug 18 reported that Dynac’s RM632 million valuation had raised eyebrows as it wasn’t clear how closely it was related to the O&G industry to be valued at almost 16 times its net profit of RM40.4 million in FY13 or whether the profits will grow steadily.

Despite the latest setback, Tan is optimistic of securing a new business venture in the future.

“As a business entity, we must have several options to choose from,” he told reporters after GBH’s extraordinary general meeting (EGM) yesterday.

He added that GBH will not  be venturing into the shipping industry again and would only make such a decision and announcement after studying all proposals.

He added that the group did not set any timeframe in looking for assets and business opportunities.

Earlier at the EGM, GBH shareholders passed its resolution to dispose of 13.93 acres of land along Jalan Segambut to Keladi Maju for RM192.4 million cash. The group will recognise a net gain of RM71.2 million from the sale. The deal is still pending approval from the state authorities.

GBH plans to use proceeds raised to fund any new business opportunity of the group.

“However, if we fail to identify new assets, the group may return part of the sum to shareholders,” said Tan.

On its existing business, Tan said the group will be maintaining its ceramic building material business despite noting that growth in the industry remains limited.


This article first appeared in The Edge Financial Daily, on October 1, 2014.

 

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