Stocks to Watch Scomi, BTM Resources, Salcon and Southern Steel

Business & Markets 2013
Written by Ho Wah Foon of   
Wednesday, 16 January 2013 19:09

KUALA LUMPUR (Jan 16): Based on filings with Bursa Malaysia, stocks to watch on Thursday could include SCOMI GROUP BHD [], BTM RESOURCES BHD [], SALCON BHD [] and SOUTHERN STEEL BHD [].

Scomi Group announced on Wednesday that it would hold an EGM on Jan 31 to vote on a proposed issuance of convertible redeemable secured bonds with an aggregate value of RM110 million that will pave the way for IJM Corp Bhd to hold a 24.34% stake in the company.

The purpose of the EGM is to seek shareholders’ approval for the proposed bond issue, together with a completed placement, that will not only turn IJM into a strategic partner of Scomi but also help Scomi meet its debt obligations. The proposed bond issue would allow Scomi to fully repay a loan facility due on Feb 13.

As there are shareholders who fear their stakes in Scomi could be diluted by this exercise, the EGM may be a stage for a showdown between the decision makers and the disgruntled shareholders.

Meanwhile, Shah Hakim @ Shahzanim Bin Zain –- a key proponent of the IJM partnership -- announced to Bursa Malaysia that he had bought 500,000 shares at 35.5 sen apiece on the open market on Jan 11. This raises his stake to 11.18%.

Besut Tsuda Wood Products Sdn Bhd, a wholly-owned subsidiary of BTM Resources Bhd, has entered into a RM6.8 million log supply agreement with Gimzan Plywood Sdn Bhd (GPSB) for two years. The agreement will provide BTM with a steady supply of logs as raw material for its sawmill operations, and at a 10% discount to market price for various types of logs. The agreement is expected to contribute positively towards the company's earnings in 2013 and 2014.

Salcon Bhd said its unit had bagged a RM110 million contract from the Ministry of Energy, Green TECHNOLOGY [] and Water's Sewerage Services Department. The contract is expected to contribute positively to its earnings and net assets. The contract will cover all works associated with the sewage rationalisation within the South Klang sub-catchment area for the next four years.

Southern Steel Bhd may attract some trading interest after the company announced that its substantial shareholder and director Datuk Dr Tan Tat Wai had bought 2.76 million shares on Jan 16.