Comintel among top gainers on proposed 45 sen special dividend payout

PETALING JAYA: Comintel Corp Bhd plans to declare a special dividend of about 45 sen per share or RM63 million after the disposal of its entire stake in its electronics manufacturing services firm for RM123.8 million.

Following the announcement, the stock was among the top gainers with its share price rising as much as 27 sen or 37.8% to 98.5 sen. At 3.30pm, it was up 20 sen or 28% to 91.5 sen. A total of 33.1 million shares were traded.

The company said in a filing with the stock exchange today that it it had on October 19 entered into a conditional share sale agreement with Aurelius Holdings for the disposal of its entire stake in BCM Electronics Corp Sdn Bhd.

BCM Electronics provides printed circuit board assembly, sub-system assembly and box build manufacturing services to original equipment manufacturers (OEM) of telecommunication equipment, network equipment, tracking and monitoring devices, power solutions and telemetric products.

Proceeds from the disposal will be used for the development of Comintel's green waste management and waste-to-energy businesses, working capital as well as the proposed special dividend distribution. However, the actual amount to be distributed will be determined and announced at a later stage.

Comintel noted that the proposed disposal represents an opportunity for the company to reprioritise its business focus and resources into further growing its existing waste-to-energy business. Its maiden waste-to-energy 2MW plant in Kuang is expected to be fully commissioned and revenue generating in the fourth quarter of the financial year ending January 31, 2018.

The company is expected to realise a one-off gain on disposal of about RM76.3 million or earnings per share of 55 sen after netting off the transaction costs.

However, Comintel might be classified as a "cash company" pursuant to the Practice Note 16 (PN17) of the listing requirements. Hence, the company is required to regularise its condition within 12 months from the day it becomes a cash company, failing which will result in it being suspended and delisted from Bursa Malaysia.

"It is the intention of the board to maintain the listing status of Comintel. The board will endeavour to take the necessary steps to venture into other viable businesses," it said, noting that its strategic plan is to focus on both the waste-to-energy and green waste management business.