KUALA LUMPUR (July 25): Shares in Pestech International Bhd traded heavily on Tuesday (July 25), following reports that IJM Corp Bhd will acquire a 44.83% stake in the electrical power technology solutions provider via a restricted issue for RM124 million.

Trading volume jumped more than fourfold to 40.24 million from 8.57 million on Monday, and more than ninefold from its 200-day average volume of 4.18 million. It was the 11th most active stock on Bursa Malaysia.

Pestech's share price was flat at 29.5 sen at Tuesday's opening bell, before falling 20.3% to an intraday low of 23.5 sen. At market close, the counter had pared losses and stood at 26 sen — down 11.86% or 3.5 sen — giving the group a market capitalisation of RM253.68 million.

It had fallen 16.13% year-to-date, and 29.73% over the past year.

On Monday, IJM Corp said it had inked an agreement with Pestech for the subscription of 800 million shares in Pestech at 15.5 sen per share, marking the construction group’s entry into the energy transmission sector.

At 15.5 sen per share, this represents a discount of 47.46% over Pestech’s last traded price of 29.50 sen, and a discount of 48.98% over the five-day volume weighted average market price of 30.38 sen up to July 21.

The move will result in IJM Corp becoming Pestech's largest shareholder with a 44.83% stake in Pestech's enlarged share capital. Currently, Pestech’s main shareholders are its chairman Lim Ah Hock (with a 32.51% stake) and its managing director-cum-chief executive officer Paul Lim Pay Chuan (19.32%).

The transaction is expected to be completed in the fourth quarter of this year.

Pestech has been loss-making since the fourth quarter ended June 30, 2022 (4QFY2022). The group posted a net loss of RM60.58 million for 3QFY2023, versus a net profit of RM6.52 million a year earlier, while revenue dropped 49.5% to RM97.26 million from RM192.63 million.

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