PERWAJA HOLDINGS BHD (-ve )
SHARES for Perwaja (Fundamental: 0/3, Valuation: 0/3) continued to rise, by another 4 sen or a whopping 23.5% to 21 sen on heavy volume. The company was first picked up by our momentum algorithm on April 30.
On that day, after trading hours, the PN17 steelmaker announced a second memorandum of agreement with China-based conglomerate, Zhiyuan to formalise the agreement to restart its Kemaman plant in Terengganu.
Under the first phase of the revival plan, Zhiyuan will invest RM100 million in the company, of which RM30 million would be in the form of security deposit for the leasing of Perwaja’s land and the balance for new machineries. Zhiyuan will also modify existing machineries and revamp product lines to reposition Perwaja as a stainless steel producer.
There is speculation that Zhiyuan may also take a stake in Perwaja via a private placement or/and rights issue. Perwaja is currently 31.25%-owned by Kinsteel.
This article first appeared in The Edge Financial Daily, on May 7, 2015.