KUALA LUMPUR (July 29): Offshore support vessel (OSV) player Marine & General Bhd (KL:M&G) said on Monday that its executive chairman and major shareholder, Tan Sri Mohammed Azlan Hashim, and his son Mohammed Zhakri Mohammed Azlan, have exercised a call option to acquire 3.2 million preference shares of Jasa Merin (Malaysia) Sdn Bhd (JMM), a 70%-owned subsidiary of the group.

In a filing with Bursa Malaysia, M&E said the preference shares, acquired from three banks, were priced at RM1.10 each, totalling RM3.52 million, and are exchangeable with 32 million ordinary shares in M&G.

Shares of M&G closed up 2.5 sen or 6.67% at 40 sen on Monday, valuing the company at RM285.74 million. Azlan is the second largest shareholder in M&G with a 6.83% direct stake (49.44 million shares) and 12.6% indirect stake held via Bijak Permai Sdn Bhd (91.24 million shares).

The preference shares were held by banks that took part in M&G's debt-restructuring initiative back in 2019, namely Affin Bank Bhd, Maybank Islamic Bhd, and Bank Pembangunan Malaysia Bhd.

JMM had issued 150 million preference shares in total under M&G's debt-restructuring scheme initiated in 2019 to banks at RM1 each. The preference shares are convertible into new M&G shares on a ratio of one preference share for 10 M&G shares.

In total, the restructuring scheme by M&G then entailed the issuance of 1.5 billion new shares to restructure RM200 million of the total of RM923.2 million debts owed by its subsidiaries.

JMM, the flagship unit of M&G, owns and manages a total of 22 OSVs, according to M&G's official website. The remaining 30% in the company is held by the Terengganu state government.

"Relevant announcements will be made when the abovementioned JMM preference shares are exchanged for the ordinary shares of M&G by Tan Sri Mohammed Azlan Hashim and Mohammed Zhakri Mohammed Azlan in due course," M&G said.

M&G's largest shareholder is non-independent executive director Abdul Rahman Ali (26.63%). Another substantial shareholder is Johan Zainuddin Dzulkifli (9.68%).

In the financial year ended April 30, 2024 (FY2024), M&E's net profit inched up 0.61% year-on-year to RM48.38 million, from RM48.09 million a year before, while annual revenue rose 13.22% to RM347.92 million, from RM307.28 million a year before.

As at end-April, M&G had total borrowings of RM621.91 million against cash of RM66.67 million and total equity of RM163.45 million. Net gearing of the OSV group stood at 3.4 times.