Lay Hong shareholders vote against share scheme for Yap family

KLANG: Shareholders of poultry company Lay Hong Bhd yesterday denied members of the Yap family, the biggest shareholder of Lay Hong with a 44% stake, from benefiting from a share issuance scheme (SIS) options, in an ongoing feud between the Yap family and shareholders of QL Resources Bhd.
QL, the second largest shareholder of Lay Hong with a 39.81% stake, had launched a takeover bid for Lay Hong after a representative of QL was voted out of the board last year. QL has continued to accumulate shares after the unsuccessful bid.
Lay Hong shareholders' voted against Yap Hoong Chai (88.89%) and the other three directors namely Yeap Weng Hong (76.46%), Yap Chor How (87.3%) and Yeap Fock Hoong (76.23%) participating in the scheme which would have allowed them to accumulate shares in the company at a discount.
Shareholders approved the remaining five directors who were nominated for the scheme.
Weng Hong and Fock Hoong are Hoong Chai's brothers, while Chor How is Hoong Chai's eldest son.
Speaking to reporters after Lay Hong's EGM here yesterday, managing director Hoong Chai said he views the outcome as fair and normal given the strained relations between Lay Hong and QL.
He however played down tensions between the two companies, stressing that his relationship with QL's managing director Chia Song Kun is still very friendly.
"We're still buying raw materials from them, there is nothing different in our relationship, the only thing is he (Song Kun) is a corporate player, he likes to acquire companies (and) we're the target," he said, adding that he has no plans to sell his stake in Lay Hong, as he foresees good potential in the company.
Hoong Chai, who maintains that the Yap family was not behind the ejection of QL's representative to Lay Hong last year, said he would not look to reappoint the director at this point though, citing conflict of interests. He instead said that he would consider buying over QL's stake in Lay Hong at a reasonable price.
Meanwhile, Lay Hong's shareholders approved the proposed private placement of 7.62 million new shares, representing up to 15% of its existing issued and paid-up share capital, to meet public shareholding requirements.
Hoong Chai said the private placement would increase Lay Hong's public shareholding spread to 26% compared with 15.13% as at March 23, 2015. Lay Hong has until September 30, 2015 to meet the listing requirement of at least 25% public shareholding.
Upon private placement, the Yap family and QL's stake in Lay Hong will be reduced to 38.24% and 33.86% respectively.
The exercise will raise up to RM23.1 million for Lay Hong.
Operationally, Chor How said besides focusing on the production, Lay Hong's expansion plans will also include marketing and channeling in order to secure bigger market share.
The chicken and chicken-related products segment contributes 60% to the group's revenue, the eggs division meanwhile at 30%.
For nine months ended December 31, 2014, Lay Hong posted a net profit of RM14.15 million, a jump of more than sixfold compared with RM2.12 million in the previous corresponding period.
Hoong Chai said the full year results ended March 31, 2015, which will be released soon, is expected to be much better than last financial year.
Lay Hong shares were untraded yesterday and last Friday, with last Thursday's closing price of RM3.40. QL's shares meanwhile were unchanged at RM3.91 yesterday.