KUALA LUMPUR (Jan 21): Bintai Kinden Corp Bhd, whose share price has more than halved since it hit its record high of RM1.39 in early December, announced that it intends to diversify into property development and management as a strategy to reduce its “reliance solely on the mechanical and electrical (M&E) engineering business”.

On top of that, the company is also proposing a private placement exercise to raise fresh capital of RM58.43 million to fund the new venture.

It is worth noting that this is the second venture out of its core M&E business in less than six months.

The company announced its venture into the distribution of Covid-19 vaccines in August last year. Its unit Bintai Healthcare Sdn Bhd was granted the exclusive rights from Generex Biotechnology Corp and its subsidiary NuGenerex Immuno-Oncology Inc to distribute, sell and commercialise Covid-19 vaccines in Malaysia, Brunei, Myanmar, Cambodia, Timor-Leste, Indonesia, Laos, the Philippines, Singapore, Thailand and Vietnam.

Bintai Healthcare was also appointed as the exclusive distributor for the Greenie Medi Cold Chain Box, designed for the storage and distribution of Covid-19 vaccines in Malaysia.

Since the announcement of its healthcare venture, Bintai Kinden’s share price surged to touch a high of RM1.39 on Dec 7, 2020, up 1,290% from its share price of around 10 sen in early August.

Its two largest shareholders had dumped the company’s shares in December last year. Its second largest shareholder Nusankota Development Sdn Bhd sold its entire stake of 50.03 million shares or 14.4% interest on the open market on Dec 16 last year. Meanwhile, its largest shareholder Bintai Holdings (M) Sdn Bhd sold 28.5 million shares or an 8.14% stake in the group, which reduced its shareholding to 31.69 million shares or 9.05%.

Bintai Kinden proposed to undertake two mixed property development and management projects, which is focused on providing comprehensive healthcare and wellness services as well as assisted living.

One of the projects is the development of condotels, wellness condominiums, retirement and lifestyle apartments, a wellness club as well as a medical specialist centre to be known as Holistica Melaka, to be located at Melaka Tengah, Melaka, with a combined gross development value (GDV) of RM558 million.

The group is also looking at developing and managing a 21-storey lifestyle “condotel” to be known as Holistica Penang, which will be located in Bandar George Town, Penang, with a GDV of RM83.66 million.

“The mixed development projects are expected to contribute 25% or more of the net asset and/or net profits of the Bintai group.

“As such, the board proposes to seek the prior approval from the shareholders of the company at an extraordinary general meeting to be convened for the proposed diversification pursuant to Paragraph 10.13(1) of the Main Market Listing Requirements of Bursa Malaysia Securities Bhd,” said the filing.

“Notwithstanding the proposed diversification, the board intends to continue with the group’s existing business activities,” it added.

Bintai Kinden has proposed a private placement of up to 114.57 million new shares, representing approximately 30% of its existing share base.

Based on an indicative issue price of 51 sen per placement share, the group hopes to raise a total of RM58.43 million in proceeds, of which RM15.53 million will go towards the redevelopment and refurbishment works of an existing apartment into a fully furnished wellness condotel under Phase 1 of Holistica Melaka, while RM23 million will be used for development works of Holistica Penang.

Bintai Kinden’s share price has slid 57.5% from the peak of RM1.39. It closed at 59 sen today, valuing the company at RM225 million.

The company slipped into a net loss of RM4.15 million, or 1.31 sen per share, for the six months ended Sept 30, 2020 compared with a net profit of RM7.86 million, or 2.73 sen per share, previously.