KUALA LUMPUR (July 20): Following the failed bid to privatise the company last year, Hwang Capital (Malaysia) Bhd's largest shareholders have proposed to undertake a selective capital reduction and repayment (SCR) exercise that will see them get full control of the company.
In a filing with Bursa Malaysia today, Hwang Capital said its largest shareholder Hwang Enterprises Sdn Bhd and persons acting in concert have proposed to pay the entitled shareholders RM260.68 million or RM2.94 per share under the SCR exercise.
The SCR would be executed by cancellation of 88.67 million shares, representing a 34.75% stake in Hwang Capital held by the minority shareholders.
Today, Hwang Enterprises and Hwang Capital non-executive chairman and controlling shareholder Alex Hwang Lip Teik collectively hold 166.49 million shares or a 65.25% stake in Hwang Capital.
The proposed SCR is subject to approval from shareholders at an extraordinary general meeting to be convened, the company said.
Barring any unforeseen circumstances, Hwang Capital expects the proposed SCR to be completed in the fourth quarter of 2017.
In May last year, Hwang Enterprises and Alex had launched a voluntary takeover bid for the rest of Hwang Capital shares they did not own for RM2.65 per share.
The offerors saw valid acceptances of 85.98 million shares, representing 33.7% equity interest in Hwang Capital, as at the closing date of July 21, 2016, which was not enough to invoke Section 222(1) of the Capital Markets & Services Act to compulsorily acquire the remaining shares they did not own.
The offer price of RM2.65 was then seen as unattractive compared with its net asset value of RM3.25 per share as at April 30, 2016. The offer was made more than two years after the company sold its investment banking assets to Affin Holdings Bhd for RM1.36 billion.
Shares in Hwang Capital have been suspended since September 2016 as it had failed to meet the required public shareholding spread of 10%. As at April 28, 2017, the public shareholding spread of the company was 7.08%.