TIME ENGINEERING sale next week?

UEM Group’s proposed sale of its 45% stake in Time Engineering Bhd is expected to be announced as early as Monday, which is strong evidence of the acceleration of the conglomerate’s asset disposal programme, sources said.

The identity of the purchaser could not be ascertained at press time.

Sources close to the deal told The Edge Financial Daily that a buyer had been found as UEM continued to pare down its non-core businesses in line with the transformation programme for government-linked companies.

The disposal of Time Engineering shares was previously reported to be at around 50 sen apiece. The counter closed half a sen higher at 41 sen yesterday.

This is the second sale by UEM Group in as many months, with the first sale of Pharmaniaga Bhd to Boustead Holdings Bhd announced last month. It is believed that UEM has plans for other asset disposals as well, including the sale of Faber Group Bhd.

It is believed that one of the casualties of the Time Engineering sale is its chief executive, Steven Lim Kee Seng, who has been instrumental in the company’s changing fortunes. He had twice turned around the company — once as its general manager and most recently as CEO. Having rebounded solidly into the black, the company paid its first cash dividend this year worth one sen net.

Time Engineering has been securing jobs internationally, and was planning to make its impact felt in the domestic market.

Lim was believed to be at odds with the board as well as the parent company, UEM Group, and this is likely to lead to his departure from the company, a source said.

Meanwhile, Time Engineering disposed of a total of 40.3 million shares in Time dotCom Bhd (TdC) for RM20.83 million as at June 15, the company said in an announcement to Bursa Malaysia.

This works out to about 51.6 sen per TdC share, which is on the high end of its trading range. TdC closed at 52 sen yesterday, a more than a two-year high. The last time its share price crested that mark was on April 23, 2008.

Prior to the disposal, Time Engineering held 726.18 million TdC shares, which had been pledged to Bank Pembangungan Malaysia Bhd as security for 712.5 million redeemable secured loan stocks, which held a nominal value of RM342 million, or 48 sen per loan stock. Time Engineering would have redeemed some 43.4 million loan stocks with the RM20.83 million obtained from the disposal of the TdC shares, assuming interest costs are not factored into the redemption.

Time Engineering, post the disposal, holds a 27.1% stake or about 685.88 million shares in TdC. The company said in the announcement that the sale proceeds would go to Bank Pembangunan to redeem the loan stocks. Any excess proceeds would be used for working capital.

Time Engineering’s present stake in TdC is worth about RM356.66 million, based on the 52 sen a share price. This is equivalent to 46 sen per Time Engineering share, based on its issued capital base of 775.245 million shares.


This article appeared in The Edge Financial Daily, July 15, 2010.