TOMORROW UP OR DOWN???
Ranhill In Reverse Takeover Bid For Symphony House
• Ranhill Energy and Resources is heading for a listing on Bursa Malaysia via a reverse takeover of Symphony House after an attempt to float the company in July 2013, during which there had been a disclosure breach relating to the suspension of licences of its affiliate, Perunding Ranhill Worley by Petronas for an indefinite period.
• The previous offer was supposed to raise some RM753 million in proceeds where 70 percent of which was slated to repay borrowings as it had debts of RM1.9 billion and gearing of 1.61 times as at December 2012.
• Given the first setback on its offer, it would be an uphill task to garner sufficient interest for a second offering.
Significance: The reverse takeover provides Ranhill a shortcut and a cheaper option to the equity market, however, it would also mean absorbing Symphony House’s liabilities. The latter had a net loss of RM40.8 million for 4Q13 while cash equivalents were at RM22.8 million.