KUALA LUMPUR (May 5): Shares of financially distressed R&A Telecommunication Group Bhd were actively traded today after news emerged that it had proposed to buy a tanker company owned by Sumatec Resources Bhd and Singapore-listed Hoe Leong Corp Ltd in order to remove its Practice Note 17 status and stay listed on the ACE Market.

R&A, often a sleepy stock, doubled in its value this morning to two sen. At 11:37 am, it was traded flat at one sen after seeing 25.09 million shares changing hands.

R&A yesterday reported to the stock exchange that it had signed a non-binding term-sheet with Semua International Sdn Bhd for the proposed acquisition of a 100% stake in special purpose vehicle (SPV) Semua Shipping Sdn Bhd (SSSB) for RM150 million, to be satisfied by the issuance of new R&A shares at 10 sen each.

Semua International will transfer its entire SSSB stake to the SPV, which will be owned by existing shareholders of Semua International in similar shareholding proportions.

Semua International shareholders comprise Sumatec and Ebony Ritz Sdn Bhd with each holding a 49% stake. Hoe Leong holds the remaining 2% stake.

Hoe Leong owns a controlling 80% stake in Ebony Ritz. Auspicious Journey Sdn Bhd holds 20% in Ebony Ritz.

R&A said SSSB owned six product tankers, which have long-term charters with Shell Malaysia.