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Thursday, April 23, 2009

Binaik fourth to be taken private this year

Binaik Equity Bhd, a property developer, is set to be taken private in a deal worth some RM19 million, making it the fourth company that wants its shares to be taken off Bursa Malaysia this year.

Minority shareholders will be offered 75 sen a share, 23 per cent higher than its last closing price of 61 sen on Monday.

The stock was suspended from Tuesday and will resume trading today.

Binaik's major shareholder, Yeo Brothers Sdn Bhd (YBSB), has sent a letter to the board, asking the company to consider the privatisation.
The main reason for this is the poor trading volume of its shares.

"The average daily trading volume of Binaik shares for the past three years up to April 20 was approximately 37,000, representing only 0.15 per cent of Binaik's current public shareholding spread of 25 million shares," the company said in a statement to Bursa Malaysia yesterday.

Binaik will carry out a selective capital repayment exercise for the privatisation. This means that the company will return its capital to shareholders, excluding those who will not participate, normally the major shareholders.

YBSB and its related parties, which hold a total of 74.41 per cent of Binaik, will not take part in the repayment.

The Johor-based Binaik will use internal funds, borrowings, or a loan from YBSB to fund the repayment.

The company was barely profitable last year. It made a net profit of RM41,000 compared with RM1.3 million in financial year 2007. Revenue, however, increased to RM80 million from RM72.2 million in 2007.

Binaik will have to hold a shareholder meeting to seek approval for the capital repayment. It has hired HwangDBS Investment Bank Bhd as its adviser and expects the deal to be done by the end of September.

By Business Times

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