Thursday 28 Mar 2024
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KUALA LUMPUR: Shapadu Corp Sdn Bhd, owned by the family of late businessman Datuk Shahrani Abdullah, is closer to becoming a substantial shareholder of LFE Corp Bhd after the latter received Bursa Securities’ approval last Thursday  to implement its proposed regularisation plan.

The approval paves the way for Shapadu, via its wholly-owned subsidiary Shapadu Capital Sdn Bhd, to subscribe to 66.67 million new LFE shares, representing a 15% stake in LFE under its regularisation plan.

This confirms a report in The Edge Financial Daily published on March 31 that the diversified group, which is involved in the oil and gas (O&G), property development and logistics  services, hoped to enter the construction market through this investment, which is also subject to approval by LFE shareholders.

The approval granted by Bursa Securities for the proposed regularisation plan comes with a moratorium to be imposed on Shapadu Capital that it is not allowed to sell, transfer or assign its entire shareholdings in LFE for six months from the date of listing of all the new LFE shares on Bursa Malaysia.

When contacted by The Edge Financial Daily, Shapadu group executive director Datuk Rosthman Ibrahim said the group will proceed to subscribe to LFE’s private placement.

“We expect to complete the placement exercise in two months,” he said.

While the price of each placement share has not been fixed, Rosthman previously indicated that Shapadu plans to invest RM20 million in LFE’s private placement.

In an earlier interview, Rosthman also said Shapadu plans to award its other property projects under development to LFE following completion of the share placement.

LFE on Dec 16, 2014 bagged a RM350 million contract from Shapadu to build the Shapadu City Village development in Precinct 2, Putrajaya. The project is expected to be completed in 36 months from Dec 16, 2014.

“[Through the private placement,] we (Shapadu) will emerge as one of the major shareholders together with the Liew family. Our aim is specifically to improve the performance of the company by injecting all our property projects into LFE [at a later stage], which will remain as a construction player,” Rosthman said.

LFE’s regularisation plan also involves capital reduction, share premium reduction, rights issue, part debt settlement as well as amendments to its memorandum of association and articles of association.

Bursa Securities’ approval for its regularisation plan will lift LFE out of its Practice Note 17 (PN17) status, which was triggered when the company’s shareholders’ equity for the financial year ended July 31, 2012 (FY12) fell below 25% of its issued capital.

LFE (fundamental: 0.15; valuation: 0.5) shares have risen 65.63% year-to-date. The stock closed 43.24% or eight  sen higher to 26.5 sen last Friday, with 28.41 million shares traded, making it one of the most active stocks on the exchange. Its market capitalisation stood at RM22.5 million.


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. Go to www.theedgemarkets.com for more details on a company’s financial dashboard.

 

This article first appeared in The Edge Financial Daily, on May 11, 2015.

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