This article first appeared in The Edge Malaysia Weekly, on May 23 - 29, 2016.

SOME 396.1 million shares worth RM424.6 million changed hands off market between May 11 and May 17. Among the more notable transactions were those  involving Reliance Pacific Bhd and Komarkcorp Bhd.

On May 13, Reliance Pacific’s  substantial shareholder Ibu Kota Developments Sdn Bhd acquired 160.3 million shares or an 18.7% stake via three direct deals from its CEO Datin Irene Tan at 22.5 sen apiece. The price was a hefty 40% discount to the 37.5 sen its shares fetched on the open market. This raised Ibu Kota Developments’ stake to 30.96%, just 2% shy of the 33% threshold for triggering a mandatory offer.

Ibu Kota Developments — a private vehicle of Datuk Md Wira Dani Abdul Daim and Toh Puan Mahani Idris, the son and wife of former finance minister Tun Daim Zainuddin — is now the largest shareholder of Reliance Pacific after accumulating shares the past few weeks. The net profit of the travel and hotel operator-cum-property developer plunged 70% year on year to RM600,000 in FY2015. It was RM8.8 million in the red in 9MFY16.

Over at labels manufacturer Komarkcorp, 15.6 million shares or a 12.53% stake crossed in a single direct deal after the closing bell at 50 sen apiece on May 12, a 3.1% premium above the open market price of 48.5 sen. Bursa Malaysia filings show that the seller was executive director Lim Pei Tiam @ Liam Ahat Kiat, who ceased being a substantial shareholder after selling the shares to Hong Kong-based King Regal Investments Ltd, which emerged as a substantial shareholder with a 12.53% stake on May 12.

The export-oriented company returned to profitability in 9MFY2016 with a net profit of RM2.8 million, thanks to a 30% increase in sales to China and a weaker ringgit. Citing stiff competition in China, Komarkcorp is in the process of disposing of two subsidiaries in China to Lagora HK Ltd for RM48 million. The bulk of the proceeds will be used to pare down its debt and to purchase new machinery. The company will also distribute a cash dividend of three sen per share after the disposal, giving a 6.4% yield.

Elsewhere, printed circuit boards and electronic products maker AE Multi Holdings Bhd saw 25.8 million shares or a 10.6% stake traded off market in various direct deals on May 12. Some 13 million shares were crossed in direct deals at 11 sen per share, and 11 million shares at 12 sen apiece, representing a 12% and 4% discount, respectively, to the 12.5 sen the counter closed at on the day.

The identities of the buyers and sellers were not known at the time of writing. Interestingly, a May 9 filing showed that the company’s founder-cum-executive chairman Yang Wu-Hsiung acquired 5.4 million shares through the exercise of an employee stock option scheme on May 6. The stock surged 24% to close at 13 sen last Wednesday, with trading volume spiking after the announcement.

Meanwhile, 33 million shares or a 3.5% stake in Destini Bhd changed hands in two direct deals at 62 sen apiece on May 11, slightly above the open market price of 61.5 sen apiece at the time. The parties to the deals were unknown at the time of writing. It is noteworthy that group managing director Datuk Rozabil @ Rozamujib Abdul Rahman, via private vehicle BPH Capital Sdn Bhd, acquired 12.5 million shares through the conversion of warrants on May 5.

Destini, which has operations in Malaysia and Singapore, provides maintenance, repair and overhaul services, specialising in safety, survival and rescue equipment for the aviation, marine and oil and gas industries. As at end-April, Norway’s sovereign wealth fund, Government Pension Fund Global (GPFG), had a 1.6% stake in the company.

At O&C Resources Bhd, two blocks of shares totalling six million shares, or a 2.8% stake, crossed in two direct deals on May 13 at 50 sen apiece, 10.7% below the open market price of 56 sen at the time. The parties to the deals, however, were not revealed at the time of writing.

Formerly known as Takaso Resources Bhd, the condom and baby care accessories manufacturer has been loss-making since 2006. Last week, shareholders approved its plan to diversify into property development to turn the company around. 

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