VTI Vintage to go big into construction division

PETALING JAYA: VTI Vintage Bhd, which expects to come out of its Practice Note 17 (PN17) status within the year, sees large-scale construction projects as a catalyst to turn it back to profitability.
The firm is tendering a few construction projects worth at least RM100 million in the Klang Valley, Pahang and Johor, with most of them being residential projects.
"We'll announce one or two (construction projects) in a month or two," its managing director Datuk Beh Hang Kong told a press conference after the company's EGM here yesterday.
He said the group will focus more on the construction segment and even undertake niche project developments at a later stage, but stressing that its tile manufacturing business will still be there.
The loss making construction firm company has been categorised as a financially distressed company since February 2010 when its shareholders' equity fell to less than 25% of paid-up share capital.
"We're at the very tail-end of the completion (of the regularization plan), it should take a month or one-and-a-half months to be fully completed."
Last week, Bursa Malaysia approved VTI Vintage's application for an extension until October 31 to implement its pending implementation for a rights issue exercise, set-off and debt settlement.
On another note, with the emergence of LBS as a substantial shareholder, Beh opined it could bring synergy for both parties.
"LBS is a big player in the development side, we might be able to collaborate on some construction work…They (LBS) develop a lot of landed properties, that's also a big market for us," he said.
He did not rule out the possibility that VTI Vintage may partner with LBS for property development in the future.
"It's not at the moment, but if the opportunity arises, we may explore it," he added.
Last month, LBS subscribed a total of 8 million new shares in VTI Vintage for RM4 million or 50 sen apiece through a placement exercise, which resulted in LBS having a 21.92% stake in VTI Vintage. Beh, meanwhile, is still the largest shareholder with a 29.91% stake.
LBS managing director Datuk Seri Lim Hock San, who also sits on VTI Vintage's boardroom as a non-independent non-executive director, said the deal will create value for LBS, but cited it is "too early" to comment whether there is an intention to take up more shares in VTI Vintage.
"We're coming in as a shareholder, we sit on the board to give advice and ideas, we're still focused on the manufacturing and construction. Other than that, we don't cross too far," he said.
For the six-month ended June 30, 2014, VTI Vintage net loss widened to RM3.75 million from RM1.45 million net loss in the previous corresponding period.
However, Beh is confident of turning around VTI Vintage by next year upon the completion of its restructuring plan within the year.
In its EGM yesterday, VTI Vintage received a shareholders' nod to change the company's name to ML Global Bhd, to revitalize its public and corporate image.