US-based Caravan Capital buys 6.3% stake in ARB

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KUALA LUMPUR (April 28): US-based investment management firm Caravan Capital Management LLC has emerged as a substantial shareholder of ARB Bhd after acquiring a 6.3% stake in the information technology (IT) software and platform provider.

Caravan Capital acquired the stake comprising 18.5 million shares on the open market last Friday, ARB said in a filing with Bursa Malaysia.

The shares are held through MIRI Strategic Emerging Markets Fund LP (11.26 million shares or a 3.89% stake)  and Kenneth Rainin Foundation (7.07 million shares or a 2.41% stake).

Caravan Capital specialises in frontier and emerging equity markets with more than 50 years of combined experience. The firm manages investments of US$70 million (RM305.52 million) in institutional accounts and funds for institutional clients in emerging and small developed equity markets, according to the statement today.

ARB executive director Datuk Larry Liew Kok Liew described the emergence of Caravan Capital as the company’s substantial shareholder as “a signal of confidence in ARB’s strategy” in its venture in the IT segment. 

“This is indeed a unique opportunity for us to strengthen our presence in the global market, and we are hopeful that we will be able to grow and continue to further unlock the value of our business, and to deliver earnings growth to our shareholders,” he said.

Liew said attracting strategic investments from professionally managed long-term investors is crucial to any company aiming to become a market leader in a multibillion market.

“Ensuring an appropriate balance between retail and professional investors will continue to be one of the ways we seek to transform ARB into a fully mature IT software and platform provider,” he said.

ARB shares closed 3.5 sen or 14.58% higher at 27.5 sen today, with some 23.79 million shares traded. This brings the group a market capitalisation of RM80.79 million.

Over the past year, the counter has fallen by 31.25%. But since falling to a low of 10.5 sen on March 19, the stock has rebounded 161.9% within a six-week period.