KUALA LUMPUR (Nov 30): TSH Resources Bhd plans to privatise its 67.46%-owned subsidiary Ekowood International Bhd at 40 sen a share to restructure the loss-making unit.

Oil palm plantation entity TSH said in its letter to Ekowood today that TSH planned to privatise wood flooring manufacturer Ekowood via a share exchange scheme. Under the scheme, Ekowood shareholders will transfer their shares to TSH in exchange for new TSH shares at RM1.92 each.

According to TSH's letter, the company already owns 113.32 million shares or a 67.46% stake in Ekowood. Persons acting in concert with TSH collectively hold 10.81 million shares or a 6.44% stake in Ekowood.

TSH said the proposed privatisation of Ekowood aimed "to improve its financial performance".

Ekowood told Bursa Malaysia: "The board will deliberate on the proposed privatisation and decide on the next course of action. Further announcement will be made in due course."

Ekowood's financials have weakened. Net loss widened to RM340,000 in the second quarter ended June 30, 2016, from a net loss of RM88,000 a year earlier.

First half net loss stood at RM1.42 million versus a net loss of RM232,000 a year earlier.

Ekowood's latest reported net assets per share stood at 57 sen. At 12:30pm today, Ekowood shares rose 0.5 sen or 3% to 19.5 sen for a market value of RM32.76 million.