Tuesday July 10, 2012
MMC to privatise AIRB
It proposes to take Aliran Ihsan private via capital reduction, repayment
Upon completion of the proposed SCR, expected to be by the first quarter of 2013, MMC would emerge as the sole shareholder of AIRB, whose other significant shareholders at present include Lembaga Tabung Haji, Effective Strategy Sdn Bhd and Public Dividend Select Fund.
In a statement to Bursa Malaysia, MMC explained that the proposed SCR entailed a reduction of the issued and paid-up share capital of AIRB from RM264.7mil, represented by 264.7 million units, to RM83.6mil, represented by 83.6 million units by way of cancelling a total of 181.1 million AIRB shares.
Shares to be cancelled comprised the 98.4 million units held by the shareholders other than MMC, and 82.7 million units held by MMC.
Upon successful completion of the proposed SCR, MMC said it would hold the entire remaining 83.6 million shares in AIRB, resulting in the latter becoming a wholly-owned subsidiary of MMC.
It would delist AIRB from Bursa Malaysia.
MMC said pursuant to the proposed cancellation of 181.1 million AIRB shares, qualified shareholders would be entitled to receive a capital repayment of RM181.1mil, which was equivalent to RM1.84 per AIRB share, while MMC would waive its own entitlement for the capital repayment of RM82.7mil under the proposed SCR.
The capital repayment exercise would be funded through the internal funds of AIRB.
“The intention of privatising AIRB is timely given the near term expiry of AIRB's main concession/contract, coupled with the illiquidity and lower trading volume of AIRB shares,” MMC said in a statement.
“This move will allow MMC to fully consolidate AIRB's earnings into its accounts and also enable both companies to derive more benefits from each other,” it added.
It was noted that the bulk of AIRB's operating revenues are generated from its concession-related businesses, namely, Southern Water Corp Sdn Bhd (SWC), Equiventures Sdn Bhd (ESB) and Aliran Utara Sdn Bhd (AU).
The concession/contract for SWC and AU would be expiring within the next 24 to 28 months, while the concession for ESB had already expired last month.
Both MMC and AIRB were suspended from trading yesterday. AIRB was last traded at RM1.75, and MMC at RM2.61.
Both counters will resume trading today.