New shareholder for Extol

ACE Market-listed Extol MSC Bhd may get a new lease of life with the recent entry of a new shareholder in the loss-making company.

Last week, Mohd Badaruddin Masodi emerged as a substantial shareholder after acquiring 10.2 million shares or a 9.76% stake in Extol, becoming its fourth largest shareholder.

Newly-appointed CEO Lim Chew Hian ceased to be a substantial shareholder in the company after disposing of her entire shareholding of 8.7 million shares at 19 sen apiece. Chairman Tan Chin Eng had also disposed of one million shares.

Extol, an ICT security solutions provider, has been a loss-making concern for the last two years.

For FY10 ended Sept 30, net loss widened to RM1.7 million from net loss of RM1.2 million in FY2009. Revenue fell 38% to RM10.4 million from RM16.6 million previously.

The company continued to post losses in 1QFY11 ended Dec 31 of RM447,000 compared to net loss of RM943,000 in the previous corresponding quarter. Revenue slipped 14% to RM1.8 million during the quarter. As at end-December 2010, Extol had cash and cash equivalents of RM3.8 million while total borrowings stood at RM880,000.

Prospects for the company may not look any rosier in the coming months, as Extol noted that its 1Q revenue fell due to increased market competition and reduction in sales to dealers.

While the reason for Badaruddin’s entry into the loss-making company is not known, his emergence could spell a change in Extol’s fortunes.

Badaruddin is an independent non-executive director at Wijaya Baru Global Bhd. A search on Badaruddin shows that he is a director and shareholder in Tanjong Agas Builders Sdn Bhd (TAB), a nominee company of Tanjong Agas Supply Base & Maritime Services Sdn Bhd (TASBMS). Another shareholder of TAB is Tengku Muda Pahang Tengku Abd Rahman Tengku Ahmad Shah.

TASBMS, which is linked to the Pahang royal family, is the developer for the Tanjong Agas Oil & Gas and Logistics Industrial Park land measuring 4,260 acres (1,704 ha)  in Tanjong Agas, Pekan, Pahang.

Last year, the government allocated an additional RM300 million to the project under the 10th Malaysia Plan on top of the RM150 million allocated under an earlier stimulus package.

Extol’s share price has been rallying in the past month gaining some 47% since April 1 with heavy trading in the usually quiet counter. Year-to-date, the counter has risen a good 175%.

It is uncertain what plans the new shareholder has for Extol, but it would certainly be interesting to watch to see how Badaruddin intends to revive the company. - by Joy Lee of theedgemalaysia.com