Monday, October 4, 2010

GPlus major shareholder buys into Equator

Datuk Ooi Kee Liang, who was at the centre of the shareholder feud in Golden Plus Bhd (GPlus) two years ago, has emerged as the single largest shareholder in Equator Life Science Bhd.

Ooi, via his investment vehicle Ideal Sun City Sdn Bhd, bought 75.2 million shares or 32% in the loss-making biotechnology company last Thursday.

Ooi is now the executive chairman of Equator, taking over from the former substantial shareholder Koh Ah Keng, who sold his stake to Ooi.

Koh and his son Koh Yueh Leong, who is the managing director, ceased to be substantial shareholders in Equator last Thursday after they sold off 23.34 million or 9.93% equity stake in the company.

On top of that, Equator’s Taiwanese non-independent non-executive director Wang Ting Peng sold 10.8% while substantial shareholder Yang Wen Shiung disposed of an 11.62% equity stake in the firm.

All in, some 68.13 million shares or 32.25% had changed hands in recent weeks. The sizeable chunk of shares is just a whisker away from the threshold of 33.3% that triggers a mandatory general offer in Equator.

After the divestments, Yueh Leong and Ah Keng currently hold 1.68% and 3.51% stake in the company, respectively. Meanwhile, Wang owns 4.96% stake and Yang 3.37% stake in Equator.
Ooi is now the executive chairman of Equator. Photo by Mohd Izwan Mohd Nazam

Ooi is now the executive chairman of Equator. Photo by Mohd Izwan Mohd Nazam

It is not clear what are the values that Ooi, the new major shareholder, has seen in Equator, which had defaulted in loan payments.

When contacted, Yueh Leong declined to reveal his plans, only saying that there would  be new investments with the emergence of a new shareholder.

“There are no concrete plans yet. We will make the necessary announcements when the time is right. But I can ensure you that our management would remain the same,” he told The Edge Financial Daily last Friday.

Its share price spiked up two sen, or 36%, to 7.5 sen last Friday on news of the new shareholder. The stock has been in the doldrums since listing in 2005, never trading above its initial public offering price of 50 sen.

ACE-listed Equator, which is involved in the progapagation of horticultural plants, has just completed the sale of a piece of land in Johor to Sin Chew Media Corp Bhd for RM2.94 million to raise funds for loan payments.

For FY09 ended Dec 31, the company incurred a net loss of RM9.8 million on turnover of RM12.46 million. It remained in the red for the following two consecutive quarters. For 1HFY10 ended June 30, 2010, it posted a net loss of RM2.49 million on revenue of RM2.7 million.

Its balance sheet shows cash balance of RM70,000 versus short-term borrowings of RM9.42 million.

Ooi’s name surfaced in GPlus when Indian Corridor Sdn Bhd bought an 11.8% equity stake in the property developer in late-2007.

Back then Indian Corridor and the other shareholder Pembangunan Qualicare Sdn Bhd wanted to remove the board of directors of GPlus. Ooi was among the five candidates that intended to seek appointment to the GPlus board after the directors have been ousted.

However, the plan to remove the board did not materialise.

Interestingly, GPlus, whose shares have been suspended from trading since August last year, was also in the limelight last week with regards to the directive from Bursa Malaysia to conduct a special audit on its financial accounts.

In a statement last week, the stock exchange voiced its concern over the conduct of the financial and business affairs of GPlus and the financial information provided by the company to date.

Bursa has urged GPlus, in which Indian Corridor holds an 18.61% equity stake, to commence a special audit soonest possible.

However, the property developer said the quotation of RM1.4 million — RM500,000 in professional fee and RM900,000 for disbursement — from PricewaterhouseCoopers was too high.

The board told the media that it had found another auditor that could do the job for just RM500,000. And shareholders in last week’s AGM voted to pay only RM500,000 for the special audit.

It seems the uncertainty over the appointment of the special auditor remains due to the fee issue.

Back at Equator, it will  be interesting to see if Ooi can make a difference and turn around the company’s fortunes.

This article appeared in The Edge Financial Daily, October 4, 2010

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