PublicInvest Research

Fiamma Holdings Berhad - New Controlling Shareholders

Publish date: Thu, 19 May 2022, 09:58 AM
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Fiamma Holdings Berhad (Fiamma) announced the emergence of new controlling shareholders in the form of Signature International Berhad (SIB) and Divine Inventions Sdn Bhd who have acquired a combined 29.6% equity interest in the company for RM180m. The 29.6% stake or 150m shares in Fiamma was acquired from the company’s Group Managing Director and CEO, Lim Choo Hong (Lim) at RM1.50 per share. We view this development positively as Fiamma will be able to tap on the supply chain of the Chin Hin Group of companies, which also includes a listed property development arm, for future growth. We make no changes to earnings estimates pending clarity on plans of its new owners. We maintain our Outperform call with an unchanged sum-of-parts (SOP)-based TP of RM1.22.

  • Signature International (SIB) is mainly involved in design, product development, manufacturing, marketing and distribution of kitchen systems, wardrobe systems, and built-in kitchen appliance. SIB also fabricates and manufactures glass and aluminium products. Its flagship brand, Signature Kitchen, has presence across 15 countries (Thailand, Indonesia, Vietnam, Cambodia, Brunei, Philippines, Maldives, Pakistan, UAE, Sri Lanka, India and Singapore, in addition to Malaysia) in both retail and corporate projects.
  • Divine Inventions Sdn Bhd (DISB) is a private entity controlled by the family of Datuk Seri Chiau Beng Teik (DSC), the founder of Chin Hin Group Berhad, who holds 89.7m shares or a 32.5% indirect stake in SIB. DSC emerged as a substantial shareholder of SIB after acquiring 80m shares or 31.2% stake in the company last year.
  • Conditional share sale agreement (SSA). SIB and DISB have entered into an SSA with Lim separately, to acquire 120m and 30m shares respectively, at RM1.50 per share. The purchase consideration of RM180m will be satisfied wholly by cash, and is binding regardless of the prevailing market price of Fiamma Shares. Completion of the acquisition is expected by the second half of 2022, pending approval from shareholders of SIB at an extraordinary general meeting to be convened.

Source: PublicInvest Research - 19 May 2022

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