LBS Bina prepping ML Global for growth

PETALING JAYA: LBS Bina Group Bhd, which is expected to announce a corporate exercise today, is grooming its 51.1%-owned listed subsidiary ML Global Bhd as a vehicle to secure government and private construction jobs, having placed senior staff at ML Global to assist in setting up the direction and workflow of the construction company.
Trading in LBS’s and ML Global’s securities has been suspended for three market days from last Friday to today pending a material announcement. 
LBS managing director Tan Sri Lim Hock San, who is also ML Global managing director, said ML Global will be adopting the same business model as its parent LBS, such as getting more jobs to boost profit, build reputation of the company and to deliver projects within the stipulated time frame.
“Once we make up the directive and policies, everything will be smooth as the staff will be able follow the instructions,” he told SunBiz in an interview recently.
“Besides being a growth company, we want to put ML Global as a dividend-yield company. We will work hard to make it one of the good stocks,” Lim added.
LBS sees good prospects in ML Global’s positioning, given that there are many contract opportunities from the government.
Lim said it had bought into ML Global especially for this, even though the property developer has an existing internal construction arm, MITC Engineering Sdn Bhd, involved in the building of highrise and landed residential and industrial properties for LBS as well as external parties.
“We’ve been approached by several government agencies to tender for jobs and we feel that we should have an independent construction arm to get the jobs, so that it is in a better position to clinch deals. The government has a lot more jobs coming up so we want a share of the cake too.”
Eventually a few of LBS’s construction jobs may go to ML Global, Lim said, subject to a fair pricing.
He said when ML Global is profitable, it will think of coming up with a dividend policy.
“This is what we want to plan for ML Global but it will take one to three years, depending on how fast it grows. If ML Global expands fast, we may raise money from the market, embark on a corporate exercise or offer ML Global to institutional investors. We will plan.”
Recall that LBS emerged as a substantial shareholder of ML Global on July 24, 2014 with a stake of 21.92%, following LBS’s participation in ML Global’s placement exercise. ML Global’s PN17 classification was lifted on March 11, 2016.
LBS progressively increased its stake in ML Global to 31.95% between December 2014 and February 2016 and further upped its stake to 50.92% in April 2016, triggering a mandatory takeover offer for the remaining shares of ML Global. Subsequently, ML Global in July ceased the business operations of manufacturing and trading in roof tiles to focus mainly on the construction business.