Stocks To Watch GHL, BAT, JTI, Notion Vtec, UOA, Adventa, KSTB

Business & Markets 2013
Written by Ho Wah Foon of   
Friday, 04 October 2013 20:23

KUALA LUMPUR (Oct 4): Based on corporate announcements today, stocks that may attract investor interest on Monday could include GHL, tobacco firms, Notion Vtec, UOA, Adventa and KSTB.

GHL SYSTEMS BHD [] has proposed to make a takeover offer to acquire all of the shares in e-pay Asia Limited (EPY), a company listed on the Australian Stock Exchange, and to undertake a private placement of new shares to finance EPY purchase.  

Under the terms of the offer for acquisition, EPY shareholders can opt for either cash or exchange their shares in EPY for shares in GHL.

EPY shareholders that elect to receive cash will receive AUD0.40 per EPY Share. 

Alternatively, EPY shareholders that elect to receive GHL shares will receive 2.75 GHL shares for every EPY share held by them based on a valuation of RM0.44 per GHL share.

“The deal effectively values EPY at RM69 million.  The proposed offer price represents a 6.67% premium to EPY’s closing share price of AUD0.375 on 3rd October 2013, the day prior to this announcement,” said GHL in a press statement. 

Both GHL and EPY have core businesses that centre around the provision of payment services.

GHL said it will also be seeking shareholder approval to undertake a 20% private placement of new shares of GHL’s enlarged share capital to Cycas, a unit of private equity fund Creador II, LLC. focused on growth capital investments in Southeast Asia.

Proceeds from the private placement will partly finance the acquisition of EPY, said GHL.

Tobacco companies, such as British Amercian Tobacco Bhd (BAT) and JT INTERNATIONAL BHD [] (JTI), may come under focus after the Director General of the Royal Malaysian Customs, Datuk Seri Khazali Ahmad, stated that amendments to the Customs Act 1967 is being considered to provide for enhanced penalties for smuggling and selling smuggled cigarettes by retailers and other outlets.

The Confederation of Malaysian Tobacco Manufacturers praised the move by the Royal Malaysian Customs to propose mandatory imprisonment for the trade of illegal cigarettes.

Shahrul Azamin Abdullah, the Chief Executive of CMTM said, "Those involved in the illegal cigarette trade rake in an estimated RM1.04 billion a year and with such a huge profit, they can readily afford to absorb the risks of financial penalties. This has become part of their costs of doing business.”

The sales and profit of tobacco firms in Malaysia are said to be undermined by illicit trade in cigarettes.

NOTION VTEC BHD [] (NVB) is acquiring a 19.9% stake in Australia-listed silver mining firm Alcyone Resources Ltd for A$4.88 million (about RM14.7 million).

In a statement to Bursa Malaysia today, NVB which manufactures hard-disk drives, said the subscription of Alcyone shares at 0.5 cents (A$0.005) each comes under Alcyone rights issue.

"NVB's participation in Alcyone's untaken rights issue will provide sufficient funds for certain mine upgrading works to bring its rock crushing capacity up and CONSTRUCTION [] of a power saving grid power line and a reagent mixing plant.

"All of these cost-saving projects will be completed by end of December 2013 making it sustainable and profitable assuming no sharp drop in silver price," NVB said.

NVB said the share subscription is due for completion next month (November). Upon completion, Alcyone will issue 487.5 million free options in the firm to NVB.

If NVB converts the options into Alcyone shares, NVB’s stake in the latter will rise to an associate level of 27.1%. This will enable NVB to equity account Alcyone's earnings.

UOA Development Bhd clarified that it was not aware of any on-going negotiations to merge the company with Johor-based FOCAL AIMS HOLDINGS BHD [].

The clarification was in response to a news report which indicated there was talk that UOA may merge with Focal Aims.

According to the report, if the deal materialises, it could see the emergence of a mega property company with a gross development value of at least RM45 billion.

UOA told Bursa Malaysia: "The company remains committed to its medium to long-term plan - focusing on its core development activities and delivering a sustainable and strong financial performance to our shareholders".

ADVENTA BHD [] announced that its wholly-owned subsidiary, Sun Healthcare (M) Sdn. Bhd. has signed a long term exclusive distribution agreement with UK’s medical device company Crawford Healthcare Ltd.

Sun Healthcare will take over the exclusive sales and marketing of all Crawford’s woundcare products in Malaysia and the Asean countries, leveraging on its network of distribution in the region.

Kejuteraan Samudra Timur Bhd (KSTB) has been awarded two contracts, one each for the provision of tubular handling and running services for offshore and onshore drilling campaigns.

In an announcement to Bursa, KSTB said the contract by PC Myanmar (Hong Kong) Ltd (PCML) is for the provision of tubular handling and running services for offshore drilling campaign, while the contract by Petronas Carigali Myanmar Inc (PCMI) catered for similar services but for onshore instead.

The contract will be for three years, it added.

KTSB said the contracts are expected to contribute positively to the earnings and earnings per share of the group for the current financial year ending June 30, 2014 and in the future.

There is no indication on the value of the contracts awarded, as the value for such services depends on the demand and activity levels as well as upon services rendered by KSTB during the contract duration.