Ekowood to seek shareholders’ nod for privatisation plan

PETALING JAYA: The board of Ekowood International Bhd has agreed to present a proposed privatisation plan by way of a members’ scheme of arrangement by parent TSH Resources Bhd for shareholders’ consideration.

TSH directly holds a 67.46% stake in Ekowood. The Public Accounts Committee (PAC) collectively holds a 6.44% interest in Ekowood.

The proposed privatisation involves the acquisition by TSH of all the Ekowood shares not owned by it, and the transfer of the scheme shares from the scheme shareholders to TSH and/or its nominee. The scheme shares include Ekowood shares held by the PAC.

TSH will pay 40 sen for each scheme share, which will be satisfied entirely via the issuance of new shares of 50 sen each in TSH at an issue price of RM1.92. Based on the 32.54% stake of Ekowood held by the scheme shareholders, the proposed privatisation will cost RM21.87 million, which shall be satisfied via the issuance of up to 11.39 million new TSH shares as consideration for the exercise.

Ekowood’s share price, which started its uptrend from the end of November, closed one sen lower, to 35.5 sen yesterday.

“It is the intention of TSH not to maintain the listing status of Ekowood and accordingly, subject to the completion of the proposed privatisation, Ekowood shares will be delisted from Bursa Malaysia Securities Bhd (Bursa Securities), subject to Bursa Securities’ approval,” it said in a stock exchange filing yesterday.

Upon completion of the proposed privatisation, Ekowood will become the wholly-owned subsidiary of TSH. The proposed privatisation is subject to the scheme being effective.

TSH and its subsidiaries are principally engaged in cultivation, processing and refining of oil palm.

Ekowood and its subsidiaries have registered losses for the past seven financial years with annual loss after tax ranging from RM3.3 million to RM9.5 million. For FY2015, Ekowood Group recorded a loss of RM3.3 million.

“In view of these losses, TSH proposes to undertake a review of Ekowood Group’s business to improve its financial performance. This may result in among others, Ekowood Group’s operation being restructured and/or new capital being injected. The proposed privatisation will facilitate such rationalisation plan of Ekowood Group.”

The exercise is subject to the approval of the scheme (by way of poll) of at least a majority in number and 75% in value to the votes attached to the disinterested shares; sanction of the scheme by the High Court and the lodgement of an office copy of the sealed order obtained with the Companies Commission of Malaysia; the approval of TSH shareholders at an EGM to be convened for the issuance of the TSH consideration shares to TSH’s major shareholder, directors and their connected persons.

Barring unforeseen circumstances, the exercise is expected to be completed in the second quarter of 2017.