KUALA LUMPUR (Oct 28): Seremban Engineering Bhd (SEB) and its holding company Success Transformer Corp Bhd (STC) have denied the speculation that STC would sell off its 65% stake in SEB.
Responding to an article in The Edge Financial Daily dated Oct 28, both companies indicated that they were not aware of any corporate development regarding the disposal of STC's stake in SEB. The daily had quoted a source.
In fact, STC has rendered additional financial and management support to SEB despite the losses recorded in financial year ended Dec 31, 2014 and first half of year 2015. The losses were attributed to the cost overrun of the Sabah Ammonia and Urea Plant (SAMUR) project undertaken in Sipitang, Sabah, which was completed in April 2015, they said.
It was also stated that management has taken various steps and strategies to stabilise and revamp the loss-making SEB's financial position, while focusing on its core business of the fabrication of process equipment, especially in the palm oil refinery, food, chemical, and waste treatment industries.
"Therefore, any rumours stated in the article are purely speculative in nature, and both of the board of STC and SEB are not aware of such corporate development in relation to the disposal of STC's stake in the company," they said.
SEB dropped as much as 12.5 sen or 16.45% to 63.5 sen at noon today after the company dismissed the potential disposal plan by its holding company. At 2.40pm, SEB was down 9.5 sen or 12.5% at 66.5 sen, with 10.5 million shares traded.
STC fell four sen or 1.87% to RM2.10, with 1.23 million shares changing hands.
SEB received an unusual market activity (UMA) query from Bursa Malaysia yesterday after it hit limit up, surging to a 52-week high of 76 sen yesterday, rising 30 sen or 65.2% from Monday's close of 46 sen.
(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.)