Pinjaya to take MWE Holdings private

PETALING JAYA: MWE Holdings Bhd’s substantial shareholder Pinjaya Sdn Bhd has proposed to take the company private via a capital reduction and repayment exercise.
The company said in a Bursa Malaysia filing, that the offerors and the parties acting in concert collectively hold 32.62% equity interest in the company.
Tan Sri Surin Upatkoon, chairman of Magnum Bhd – one of the parties acting in concert – is named as the ultimate offeror through his indirect interest held via Pinjaya.
Under the proposal, a total of RM276.73 million will be paid to entitled shareholders holding the 158.13 million shares in MWE at an offer price of RM1.75 per share. The cut off period for the acceptance of the offer had been set for 5.00 pm on April 16.
"The board, save for the interested directors namely Tan Sri Surin Upatkoon and Krian Upatkoon, will deliberate on the proposed SCR (selective capital reduction) and a further announcement will be made in due course after the board's deliberation," MWE said.
Noting that the market price of the company’s shares has declined by 8.45% to RM1.30 since Jan 2, 2015, Upatkoon said in the offer letter that non-entitled shareholders will also be able to better manage the company’s capital structure and cash management as well as execute a long term strategy upon privatisation.
In addition, the company is also expected to obtain higher borrowings for its investment in the West Coast Expressway Project in which it holds 25.6% equity interest, which would result in higher cost of borrowing while eventually affecting its dividend payout capability.
In addition to that, the operating profit of the garment maker has also more than halved in the nine months ended Dec 31, 2017, due to lower sales and the slowdown in the US consumer markets. Trading of its shares have been suspended since 9.00 am.