Zelan Bhd has sold another 2.14 million shares or 0.15% of IJM Corporation Bhd via the open market at an average price of RM5.03 per share for a total of RM10.71 million cash.
The civil engineering contractor told the stock exchange yesterday it made disposals on Aug 3 and Aug 4, and the proceeds would be used to pare down borrowings and to provide working capital for the group’s operating requirements.
IJM yesterday closed unchanged at RM5.03 with 1.59 million shares done. IJM was traded at a 52-week high of RM6.80 on Sept 23, 2009, and low of RM4.28 on Dec 23, 2009.
Zelan said for avoidance of doubt, the disposal did not form any part of the 30 million IJM shares proposed to be disposed under a shareholders’ mandate as announced on July 30, 2010.
The share sales come on top of recent disposals of IJM shares — 9.4 million on June 25, 5.18 million announced on July 23, 1.78 million shares announced on July 28 and 409,500 shares announced on July 30.
The original cost of investment of the shares that were sold on Aug 3 and 4 were about RM4.14 per share at group level and RM3.50 per share at company level, and those shares had received dividend payments from IJM. As at July 31, 2010, the book value of the shares was about RM5.05 per share at group level.
Zelan said the gain on the disposal at group level was about RM1.86 million and about RM3.24 million at the company level.
The announcement of the latest disposal of IJM shares came a day after Zelan announced the entry of US fund Grantham, Mayo, Van Otterloo & Co LCC (better known as GMO) as a substantial shareholder. GMO had acquired a 5.02% stake in Zelan on Monday. The stock had closed at 62.5 sen that day.
On Wednesday, Zelan’s shares soared to a six-month high of 78 sen on news of GMO’s entry. Zelan fell five sen to 73 sen yesterday, with 29.13 million shares changing hands. The stock was traded at a 52-week high of RM1.05 on Aug 14, 2009 and low of 44.5 sen on May 31, 2010.
Boston-based GMO manages investments for endowments, pension funds, public funds, foundations and cultural institutions. As of June 30, 2010, GMO has over US$94 billion (RM297.98 billion) in client assets under management.
Written by Financial Daily
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