KUALA LUMPUR (March 31): The board of Hunza Properties Bhd has deliberated on the contents of the selective capital reduction (SCR) and repayment exercise proposal by one of its major shareholders Khor Teng Tong Holdings Sdn Bhd, and has decided to table the proposal to its shareholders.

In a filing with Bursa Malaysia today, Hunza said it will table the proposed SCR and repayment exercise to its shareholders at a forthcoming extraordinary general meeting to be convened.

“Save for the interested directors, Hunza has deliberated on the contents of the SCR offer letter and has resolved to table the proposed SCR to the shareholders of Hunza for their consideration,” read the announcement.

To recap, Khor Teng Tong Holdings, which holds a 32.3% stake in Hunza (fundamental:1.7; valuation: 1.2), had expressed its intention on March 20 to privatise the company via the SCR.

As at March 20, Hunza said Khor Teng Tong Holdings and friendly parties own a combined 59% of the company's issued share capital.

Under the SCR, minority shareholders or entitled shareholders who own approximately 41% of Hunza, will receive capital repayment of RM230.72 million or RM2.50 for each Hunza share.

The cash will be derived from the reduction of Hunza's issued and paid up capital by RM230.72 million, via cancellation of 230.72 million shares of RM1 each.

In view that the number of shares to be cancelled under the SCR is higher than its existing issued and paid up share capital of 225.1 million shares, the offeror has proposed a bonus issue to increase Hunza's share capital to a level that is suitable for capital reduction.

Upon completion of the SCR, Khor Teng Tong Holdings and friendly parties will own 100% of Hunza. The offeror plans to delist Hunza from Bursa Malaysia.

Hunza shares closed down 2 sen or 0.84% today to RM2.36, with a market capitalisation of RM535.7 million.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)