Selangor’s Menteri Besar has written to the Energy, Green Technology and Water
Minister to proposing to take over the state water service concessionaire, Syabas
SB. We are unmoved by this move as we do not see a takeover as possible without
prior consent from Puncak Niaga, its shareholders and creditors, plus the Federal
Government, which holds a golden share in the company. We also rule out the
possibility of any offer from the state government being acceptable to Puncak since
the polls are just around the corner. Hence, we keep our Trading BUY call on the
stock given its undemanding valuation and rising contribution from its O&G
division. Our FV stands at RM2.08.
Puncak Niaga seeks approval for warrants, sukuk
PETALING JAYA: Puncak Niaga Holdings Bhd is seeking shareholders’ approval for its proposed issuance of 40.91 million free warrants on the basis of one free warrant for every ten shares and a five-year redeemable convertible secured sukuk ijarah of up to RM165mil in nominal value during its EGM set on May 28.
Meanwhile, the announcement of the entitlement date for the proposed free warrants and issuance of the convertible sukuk ijarah were tentatively set in mid-June and mid-September respectively.
The company said in a stock exchange filing that barring any unforseen circumstances, the proposals were expected to be completed by the third quarter of this year subject to prevailing market conditions prior to the launch of the sukuk.
The proposal for the corporate exercise was first announced on Sept 27, 2012.
The company said the proposed free warrants would not raise any immediate funds upon issuance but noted that it would only raise funds once the warrants were exercised.
Proceeds from the exercise of warrants would be used for working capital expenses.
It also said the proceeds of up to RM165mil raised from the proposed convertible sukuk issue would be used to fund future syariah compliant acquisitions or investments agreed between the company and the sukuk holders within 12 months from the receipt of the fund.
It said it had plans to further expand its existing business mainly in the treated water, oil and gas, wastewater and environment sectors but had yet to identify any potential investments.
“In the event that no acquisition and/or investment is made within 12 months from the date of issuance of the convertible sukuk, the proceeds shall be advanced to KGL Ltd, a whilly-owned subsidiary of Puncak Niaga Oil & Gas Sdn Bhd (a wholly-owned subsidiary of Puncak Niaga) for the purpose of refinancing the USD36mil (RM107.9mil) syndicated term loan facility granted by Hong Leong Bak Bhd and OCBC Bank (M) Bhd to fund the acquisition of a pipe laying derrick barge,” it said, adding that any surplus would be used for its working capital.