KUALA LUMPUR: Century Logistics Holdings Bhd’s major shareholders who collectively hold about 44% are looking to sell their equity interest in the supply chain management and logistics provider, said sources.

It is understood that Century Logistics’ major shareholders were willing to part their stakes at RM3 to RM3.20 apiece — the price before the company’s bonus issue and share split. This translates into RM1 to RM1.06 per share after taking into account a bonus issue and share split on Oct 9.

The asking price is at a 60% to 70% premium to last Friday’s closing price of 62.5 sen. 

Century Logistics’ largest shareholder is its executive chairman Datuk Richard Phua Sin Mo, with a 26.67% stake in the company. As at Oct 21, 2014, Phua held a 19.18% direct stake and a 7.49% indirect stake through his wife Datin Lee Lay Hun and daughter Pamela Phua Jo Lyn.

Other substantial shareholders include Century Logistics managing director Steven Teow Choo Hing, who has an 11.53% stake, while his brother Teow Choo Chuan — who is the group’s executive director — holds a 6.03% stake. Both Choo Hing and Choo Chuan are nephews of Phua.

“In the past, they (major shareholders) have been approached by foreign logistics providers to buy a stake in Century Logistics, but the deal didn’t materialise due to valuation issues,” a source told The Edge Financial Daily.

In March last year, The Edge weekly reported Felda Global Ventures Holdings Bhd (FGV) as being in talks with Phua to acquire a significant stake in Century Logistics. In reply to the stock exchange’s query, the group then confirmed that it was exploring a potential corporate exercise with the Felda group, although nothing conclusive was agreed upon at that point.

One source said while FGV had initially shown interest with an offer of RM2.95 a share for the stake, an 11% premium to the price of RM2.65 it was trading in March, the talks were called off by FGV’s board of directors.

The group’s net asset per share was at RM2.13 as at Sept 30, 2014.

“The major shareholders are still keen to divest their stakes in Century Logistics, but in the meantime they are consolidating the group’s overseas operations and shifting its focus to domestic market to drive its value,” said the source.

Last year, Century Logistics exited its loss-making oil transportation operation with the disposal of its 7,119-tonne clean product tanker.

It is also disposing of its distribution centre in Rojana Industrial Park, Thailand for 320 million baht (RM32 million), with an expected net gain on disposal of RM2 million.

“We have taken a strategic decision to concentrate on growing our core domestic operations, while exiting investments abroad. The disposal presents the right opportunity for us to realise our property investment in Thailand,” Phua said in the group’s 2013 annual report.

Century Logistics’ share price has been on a downtrend since June 30, following the failed talks. The price dropped to 66.7 sen on July 2, and plunged further to 54.5 sen on Dec 16. Based on last Friday’s closing price of 62.5 sen, Phua’s 97.63 million shares in Century Logistics were worth some RM61.02 million. Its market capitalisation stood at RM228.87 million. As at Sept 30, 2014, its cash and cash equivalents stood at RM62.84 million, while its borrowings totalled RM72.58 million.

According to theedgemarkets.com, Century Logistics has a valuation score of 3, which suggests the company gives higher-than-market average returns and is trading at a lower-than-average valuation. Its fundamental score, which measures a company’s balance sheet strength and profitability, stood at 1.8, while the stock’s volatility was 2, with 1 being the least volatile. 

For the nine months ended Sept 30, 2014, Century Logistics’ net profit grew 28% to RM16.25 million from RM12.68 million a year ago, while revenue rose 15% to RM209.55 million from RM181.81 million.

In the latest quarterly announcement, Century Logistics said the group remains confident of its business model and expects to perform well in the current financial year ending Dec 31, 2014.

The company started off as a forwarding agent back in 1970, under the name of Syarikat Wakil Penghantaran & Perkapalan Century, and its transformation started in 1996 when it changed  to the current name. It has diversified into third-party logistics, oil and gas logistics as well as procurement logistics services.

This article first appeared in The Edge Financial Daily, on January 5, 2015.