Friday 29 Mar 2024
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KUALA LUMPUR (Sept 23): Shares in MMC Corp Bhd fell as much as 4% to RM1.70 on Thursday — its lowest in about two months — ahead of the group's extraordinary general meeting (EGM) slated for next Thursday (Sept 30) on the proposed selective capital reduction (SCR) and privatisation of MMC by its controlling shareholder tycoon Tan Sri Syed Mokhtar Albukhary.

The stock eventually settled at RM1.71, still down six sen or 3.4% compared to Wednesday's closing price of RM1.77, with a market capitalisation of RM5.21 billion.

The stock has been on a downtrend this week so far. Compared to last Friday's closing price of RM1.85, the stock has shed 14 sen or 7.6%.

Nonetheless, the stock has rallied some 70% since the announcement was made on June 3,  when Syed Mokhtar said he was looking to take MMC private via an SCR at RM2 per share. His vehicle Seaport Terminal (Johore) Sdn Bhd (STJSB), owns 51.76% in MMC. The exercise is expected to cost it about RM2.94 billion.

The company is seeking to obtain shareholders' approval for the proposed SCR and privatisation of MMC as well as a bonus issue during its upcoming EGM.

MMC's latest issued share capital stood at 3.05 billion shares. At RM2 per share, the SCR values MMC at RM6.08 billion. Under the SCR, it aims to cancel 1.47 billion shares. MMC’s latest issued share capital stands at 3.05 billion shares.

The announcement confirmed an earlier report by The Edge that MMC would be privatised via an SCR at RM1.80 to RM2 per share.

However, its independent adviser Alliance Investment Bank Bhd said the SCR was "not fair" as the offer price of RM2 per share is lower than the estimated value of between RM3.32 and RM3.41 — ultimately placing Alliance's estimated value of MMC at between RM10.1 billion and RM10.37 billion.

However, the adviser is of the view that the proposal is "reasonable" on the grounds that MMC shares had not traded above the offer price for three years before the proposal was announced on June 3, Alliance said in the company's circular on the exercise dated Sept 8.

A quick check showed that the last time the stock's closing price rose beyond RM2 was during January 2018, and has never returned to that level since then.

Meanwhile, to facilitate the implementation of the proposed SCR, MMC has proposed to undertake a bonus issue of 1.59 billion new shares. 

“All MMC shares to entitled shareholders including the new MMC shares to be issued pursuant to the proposed bonus issue will be cancelled pursuant to the proposed SCR," said MMC in its June 3 filing.

Permodalan Nasional Bhd is another major shareholder in MMC, with a 20.97% stake in the port operator.

Besides ports and logistics, MMC is also involved in energy and utilities, engineering and industrial development sectors. It holds 38.45% in Malakoff Bhd. 

Edited ByLam Jian Wyn
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