Business

Thursday June 4, 2009

Can-One going ahead with KJCF stake buy


PETALING JAYA: Can-One Bhd is proceeding with its acquisition of a 32.9% stake in competitor Kian Joo Can Factory Bhd (KJCF), a company almost four times Can-One’s size in terms of market capitalisation.

Ooi Teik Huat ... Can-One’s revenue has been growing at an average 36% a year since 2004.

In April, Can-One through wholly-owned subsidiary Can-One International Sdn Bhd entered into a share sale agreement with Kian Joo Holdings to buy a 32.9% stake in KJCF for RM241.12mil or RM1.65 a share.

This resulted in a legal suit by KJCF managing director Datuk See Teow Chuan and 13 others who claimed that the transaction was ‘’illegal’’.

Can-One chief operating officer and executive director Chee Khay Leong told reporters after the company’s AGM and EGM yesterday that there was “nothing preventing the sale” of KJCF to Can-One despite the legal suit filed by See.

On the status of the lawsuit, Chee said it was a matter for the courts to decide but the company would go ahead with the acquisition.

At yesterday’s EGM, Can-One shareholders unanimously approved the KJCF stake acquisition and were satisfied with the financing and payment arrangements for the exercise, said executive director Ooi Teik Huat.

The acquisition would push Can-One’s gearing ratio to a high of 3.1 times from 1.42 times at Dec 31, 2008 but the company was comfortable with that level, Ooi said.

Chee Khay Leong ... a local financial institution financing the KJCF deal.

“Yes, three times is high but you have to see where the borrowings go and they are used mainly for our plant and machinery, and working capital,” he said.

Ooi also said Can-One’s revenue had been growing at an average 36% a year since 2004 and the company needed to gear up to maintain the pace of growth.

“Our shareholders’ funds (RM143.8mil at Dec 31, 2008) are not much so we need to gear up for expansion,” he said.

On reports that it had partnered Majlis Amanah Rakyat’s investment arm for the KJCF stake acquisition, Chee said while the company welcomed any party to work with them, at present Can-One was acting on its own.

As to which bank was financing the deal, Chee would only say: “It is a local financial institution.”

Financing costs would be at prevailing market rates, he said.


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