Stocks to watch: Tebrau Teguh, MIG, Southern Steel, IJM, AZRB

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Written by Joseph Chin of
Wednesday, 01 February 2012 14:54

KUALA LUMPUR (Feb 1): TEBRAU TEGUH BHD [] will be the stock to watch when the Malaysia market resumes trading after a one-day break for the Federal Territory holidays on Wednesday.

Other stocks which could also see trading interest are MELEWAR INDUSTRIAL GROUP BHD [] (MIG), SOUTHERN STEEL BHD [], IJM CORPORATION BHD [] and AHMAD ZAKI RESOURCES BHD [] (AZRB) following the latest corporate developments.

In a surprising turn of events, Tebrau Teguh is being taken over by Iskandar Waterfront Holdings Sdn Bhd (IWH), which is offering 76 sen per share – or just one sen above the pre-suspension price of 75 sen. Its net asset per share was 75 sen as at Sept 30, 2011 while it had RM44.52 million in cash and bank balances.

IWH is buying a 33.15% stake in Tebrau Teguh Bhd, comprising of 22 million shares, from Kumpulan Prasarana Rakyat Johor Sdn Bhd (KPRJ). The proposed acquisition would trigger a mandatory take-over offer by IWH for the remaining shares.

While the one sen premium is insignificant, the upside for the low-key Tebrau Teguh is that it has been appointed to develop 413 acres of land in Pengerang, Kota Tinggi, Johor.

The Johor government has appointed Tebrau Teguh to develop the site for a comprehensive mixed development project. The land, belonging to the state government, is within the Johor oil & gas Industry hub.

Meanwhile, MIG has proposed a corporate exercise involving a share capital reduction and a renounceable rights issue of up to 150.348 million new shares.

The rights issue, at an indicative price of 40 sen per rights share, the rights share would enable it to raise between RM21.97 million and RM60.14 million.

Southern Steel Bhd swung into the red with losses of RM5.52 million in the second quarter ended Dec 31, 2011 due to lower margins and foreign exchange translation losses. Its revenue and loss before tax were RM928.84 million and RM6.40 million respectively as compared with the preceding quarter’s revenue and profit before taxation of RM734.0 million and RM17.3 million.

IJM and AZRB, whose shares had rallied after the announcement by Mass Rapid Transit Corporation Sdn Bhd for the Sungai Buloh-Kajang phase, confirmed on Tuesday they had officially received the letters of acceptance.

IJM’s phase is for package V5 of the Mass Rapid Transit costing RM974.78 million while AZRB’s contract includes the completion of viaduct guideway and other works from Plaza Phoenix to Bandar Tun Hussein Onn station valued at RM764.91 million.