Selangor Properties, ManagePay, Tropicana, Kelington, HeiTech Padu, Biosis, Lion Corp, Lion Diversified, EcoWorld, Toyo Ink and Reliance Pacific

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KUALA LUMPUR (Sept 23): Based on corporate announcements and news flow today, companies that may be in focus on Friday (Sept 25) could include the following: Selangor Properties, ManagePay, Tropicana, Kelington, HeiTech Padu, Biosis, Lion Corp, Lion Diversified, EcoWorld, Toyo Ink and Reliance Pacific.

Selangor Properties Bhd’s net profit for its third quarter ended July 31, 2015 surged almost sixfold to RM44.64 million or 12.99 sen per share compared to RM7.69 million a year ago. The surge was attributable to the foreign exchange gains in its investment holding division.

Meanwhile, its revenue increased marginally by 4.96% to RM24.76 million for that quarter compared to RM23.59 million in the previous year.

Notably, its investment holding division recorded an increase of RM92 million for the cumulative nine month ended July 31, 2015 as the ringgit weakened against the US dollar and the Singapore dollar.

Going forward, Selangor Properties expect its property investment sector to remain stable and continue to contribute positively to the group as the occupancy rates for Menara Milenium in Damansara Heights and Claremont Shopping Centre in Perth, Australia, remain high.

The group added that it was reviewing its development plan and new launches are expected to be made in late 2015; the new launch of the Bukit Permata project is expected to be in late 2015.

ManagePay Systems Bhd plans to acquire a 29.5% stake in cybersecurity firm Trustgate Bhd for RM1.8 million cash, to tap into the online security business.

In a filing today, ManagePay said that it has entered into a conditional share purchase agreement with Trustgate chief executive officer Lo Nyan Tjing to acquire 8.84 million shares in Trustgate.

Lo holds a 33.33% stake in Trustgate, according to the filing. The remaining 66.67% is held by Sigmaview Diversified Sdn Bhd.

Notably, Trustgate owns 94.43% of MSC Trustgate, one of the three licensed Certificate Authorities approved by the Malaysian Communications and Multimedia Commission.

ManagePay said MSC Trustgate has been providing cybersecurity products and services for over 10 years in Malaysia and has established strong clientele, including major financial institutions in Malaysia.

Nevertheless, audited consolidated financial statements of Trustgate for its financial year ended Dec 31, 2014 showed that it recorded a loss of RM612,756, but its net assets stood at RM5.49 million.

ManagePay highlighted that the acquisition “will enable the group to leapfrog into the cybersecurity business supplying such service to financial institutions and payee organisations”.

Tropicana Corp Bhd’s special purpose vehicle (SPV) Tropicana Danga Senibong Sdn Bhd (TDSSB) has cancelled its acquisition of a 34.2-ha leasehold land intended for a RM3.7 billion mixed development project in Johor Bahru, Johor.

In a filing today, the group said TDSSB exercised its right to terminate the sale and purchase agreement (SPA) signed on Dec 23, 2013 as the conditions precedent were not fulfilled in accordance with the SPA’s provisions.

However, it did not specify which provisions have not been fulfilled.

Recall that Johor-based developer Tebrau Teguh Bhd had, in December 2013, proposed the establishment of a joint venture with Golddust United Sdn Bhd, a wholly-owned unit of Tropicana, to jointly develop the said land in Mukim Plentong, Johor Bahru,

The SPV, Renown Dynamics, would acquire the land, which is partially under water and needs to be reclaimed, for RM444.3 million from Tebrau Teguh.

Tebrau Teguh would hold 30% in the SPV, which would develop the leasehold land, while 70% would be taken up by Golddust United.

Kelington Group Bhd’s 100%-owned subsidiaries Kelington Engineering (S) Pte Ltd (KES) and Puritec Technologies (S) Pte Ltd (PTS) have received contracts totalling RM108 million from M+W Singapore Pte Ltd.

The group announced on Bursa today that KES has received a letter of award (LoA) dated Aug 19 from M+W on Aug 21 for the supply, execution and completion of the BulkGas System and Clean Dry Air Distribution.

The contract sum is RM43 million for seven months. It is expected to be completed by the first quarter of 2016.

Meanwhile, PTS received a LoA dated Sept 7 from M+W on Sept 18 for the supply, execution and completion of the Exhaust Distribution System.

The contract sum totals RM65 million for eight months. The job is expected to be completed by the second quarter of 2016.

HeiTech Padu Bhd has been awarded with a contract worth RM38.35 million by the Ministry of Home Affairs for the maintenance of the Malaysian Immigration Department’s systems.

The contract comprises maintenance works for the equipment and software computer system of the Immigration Department.

In a filing to Bursa, HeiTech Padu said that the RM38.35 million contract commenced on Sept 16, 2015 for a period of three years up to Sept 15, 2018. Extension or renewals are at the discretion of the government.

Biosis Group Bhd’s wholly-owned unit Biosis Cosmeceuticals Sdn Bhd (BCSB) received a notice of demand from AmBank (M) Bhd involving an outstanding sum of RM876,628.48.

Biosis said in a filing today that the notice of demand is a result of BCSB failing to settle the amount outstanding under the term loan facility as at Aug 31, 2015 of RM876,628.48 with AmBank.

“The company is currently in discussion with its solicitors on the next course of action in respect of the above matter,” Biosis said.

Financially-troubled Megasteel Sdn Bhd, a 78.89% subsidiary of Lion Corp Bhd and a 21.11% associate of Lion Diversified Holdings Bhd, has cross defaulted on RM3.02 billion worth of loans.

In a filing with Bursa Malaysia, Lion Corp said the financially-troubled Megasteel is unable to meet its payment for the banker’s acceptance (BA) due today in respect of a working capital facility, resulting in a default.

“Megasteel has been operating under difficult environment due to the rampant importation of steel products into the country at dumping prices,” the filing stated.

“As a consequence, Megasteel has been suffering losses for several years, resulting in the BA default,” it added.

Lion Corp said the BA default will give rise to a default by virtue of the cross default provision under principal loan documents relating to a RM21 million term loan facility agreement, RM683 million worth of syndicated term loan facilities agreements, RM119.5 million worth of bilateral working capital facility agreements and RM2.2 billion worth of ringgit-denominated bonds, US dollar-denominated debts, as well as redeemable convertible secured loan stocks issued by Lion Corp.

Lion Corp said upon default, the respective lenders shall have the right to declare the cancellation of the banking facilities and all sums outstanding under the respective loan documents shall become due and payable immediately.

“Following thereto, the lenders may enforce on the securities created under the respective loan documents, if any,” it added.

Lion Corp, which was declared a Practice Note 17 company on Oct 25, 2013, is also a 34.01%-owned associate of Lion Diversified.

The proposed multi-billion township development in Kuala Selangor by the Eco World Development Group Bhd (EcoWorld) may have run into some hiccups as the Selangor state government said today that some of the lands that EcoWorld intends to buy for the development are involved in an ongoing legal case.

EcoWorld announced yesterday that its unit Paragon Pinnacle Sdn Bhd is acquiring 26 pieces of leasehold land in Kuala Selangor, Selangor — collectively measuring about 2,198.4 acres (889.66ha) — from four different vendors for RM1.181 billion cash.

It intends to develop the land parcels into a self-contained township, with a potential gross development value (GDV) of approximately RM15 billion, based on preliminary management estimates.

However, the Menteri Besar Incorporated Selangor (MBI), in a statement today, said the lands that EcoWorld is acquiring, in particular those located in the planned township of Alam Mutiara, are the same tracts that the state government intended to acquire.

These tracts, it said, “are currently involved in ongoing legal proceedings in court”.

When contacted by theedgemarkets.com, MBI chief operating officer Soffan Affendi Aminudin explained that these were in reference to the 14 pieces of land that EcoWorld is acquiring from Mujur Zaman Sdn Bhd.

The tracts carry a collective land size of 1,313.81 acres — about 60% of the collective size of lands that EcoWorld is buying.

“We are in the midst of acquiring the lands from the vendor and the final result is still pending for court decision,” he said.

Hence, he said MBI will explore any legal relief or remedies, including but not limited to the possibility of making an application for an injunction, due to the action by the relevant vendor.

Toyo Ink Group Bhd has entered into a US$35 million consultancy service agreement with Phu My Vinh Consulting Investment and Trading Service Company Ltd (PMV) for the former’s venture to secure a power generation project in Vietnam.

The agreement facilitated PMV’s advice on research while supporting the negotiation on the build-operate-transfer, power purchase agreement and land lease agreement pertaining to the two 1,000-MW coal-fired thermal power plants construction in the Song Hau Power Complex with the relevant authorities in Vietnam, according to the filing to Bursa Malaysia today.

Yesterday, Toyo Ink’s shareholders granted the approval for the execution of the US$35 million consultancy service agreement.

The total fee payable for the consultancy service of US$35 million, excluding any associated taxes, is equivalent to 1% of the total development cost of the power plant project at US$3.5 billion (RM13.9 billion), according to the filing.

As of now, the ink manufacturer has already made a payment of RM160.2 million toward the power plant project in Vietnam.

The consultancy fees would raise the amount invested to RM310 million before Toyo Ink has even secured the project.

Tour operator Reliance Pacific Bhd, which is also involved in property development and the hotel business, is looking to launch some RM210 million worth of properties in the first quarter in 2016.

This includes the first phase of the Admiral Hill project in Port Dickson, Negeri Sembilan, which carries a GDV of RM140 million, and Zone 2 of Desa Impian in Bandar Tenggara, Johor, which has a GDV of RM70 million.

The Admiral Hill project at Port Dickson has a total GDV of RM260 million. The first phase of Admiral Hill comprises 92 units of single storey villas.

The remainder phase two — a clubhouse — and phase three, comprising high-rise villas, will make up the remaining RM120 million GDV.

As for Zone 2 of Desa Impian, Johor, it comprises 148 units of double and single storey shop offices. Desa Impian is an integrated township in Bandar Tenggara, Johor.

(Note: The Edge Research’s fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)