RM49m plan to privatise Malaysian Mosaics

The two largest shareholders of Malaysian Mosaics Bhd (MMB) (3824), a ceramic tiles manufacturer, plans to privatise the company by paying back a total of RM49 million to selective stockholders.

In a Bursa Malaysia filing, MMB said the capital repayment exercise was open to all the shareholders except for major shareholders Gek Poh (Holdings) Sdn Bhd and its wholly-owned unit Pembangunan Melati Sdn Bhd.

The privatisation will be carried out by Gek Poh providing a RM49 million advance to MMB and the latter undertaking a bonus issue of 13 new MMB shares for every 10 existing MMB Shares held by MMB shareholders.

The existing issued and paid-up share capital of MMB after the proposed bonus issue will be reduced by way of cancellation of all MMB shares of RM1 each.

Both Gek Poh and Pembangunan Melati, with a combined stake of 73.08 per cent or 57.25 million shares in MMB, have waived their entitlements to the selective capital repayment exercise and proposed bonus issue.
Under the selective capital repayment exercise, entitled shareholders will receive RM2.30 for each MMB share held before the bonus issue of new MMB shares.

The offer price is a premium of 30 per cent and 41 per cent respectively over the five-day and three-month volume weighted average market price of MMB shares up to and including July 9.

"Given the illiquidity of and thinly traded MMB shares, the exercise represents a better alternative for entitled shareholders to realise their investments an attractive price," the company said.

Meanwhile, a total of up to 27.42 million new MMB shares will be issued to the entitled shareholders via the proposed bonus issuance.

The bonus issue will be undertaken by capitalisation of up to RM27.42 million from the company's retained earnings.

For its financial year ended December 31 2009, MMB and its subsidiaries retained earnings of RM137.8 million. At the company level, MMB retained earnings of RM117.0 million.

Once the selective capital repayment exercise is completed, MMB's issued and paid-up share capital will be RM57.25 million comprising 57.25 million shares.

MMB is a certified ISO 9001 manufacturer, with three production facilities located in Kluang, Johor. Its products are marketed in more than 50 countries worldwide.