KUCHAI DEVELOPMENT BHD

KLSE (MYR): KUCHAI (2186)

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Last Price

2.18

Today's Change

-0.01 (0.46%)

Day's Change

2.15 - 2.18

Trading Volume

127,800


4 people like this.

976 comment(s). Last comment by Diamond7 11 hours ago

Diamond7

2,225 posts

Posted by Diamond7 > 1 month ago | Report Abuse

This article first appeared in The Edge Malaysia Weekly on January 8, 2024 - January 14, 2024

ROUGHLY 15 months after Kuchai Development Bhd (KDB) completed distributing its 26.51% stake in Sungei Bagan Rubber Company (M) Bhd (Sg Bagan) to shareholders, the company ended the year with an announcement of a bigger deal.

This time around, KDB is selling its assets and liabilities valued at RM275.47 million to its sister company Sg Bagan in return for shares. Again, KDB will distribute Sg Bagan shares to its shareholders. For every 1,000 KDB shares, shareholders will be entitled to 222 Sg Bagan shares under the proposal.

The controlling shareholder Kluang Rubber Company (M) Bhd will get the lion’s share of the block of Sg Bagan shares being distributed.

Kluang Rubber holds a 42.21% stake in KDB and a 43.5% stake in Sg Bagan. It is, in turn, controlled by low-profile Singaporean businessman Lee Thor Seng and his sons — Justin Lee Chung-Shih and Colin Lee Yung-Shih — via their family vehicle The Nyalas Rubber Estates Ltd. Justin is the executive deputy chairman of KDB and Sg Bagan.

It is worth noting that the divestment consideration of RM275.47 million was RM120 million more than its market cap of RM154.68 million prior to the announcement.

The divestment, which unlocks the asset value of KDB, gave a strong boost to the share prices of the three companies, lifiting them to all-time peaks on the first trading day of 2024.

The move is seen by market observers as the nonagenarian Thor Seng’s attempts to further streamline his interest in the Bursa Malaysia-listed companies, apart from unlocking asset values. This has left many wondering about his next move with KDB, which will soon be a cash-rich listed shell company.

“Would he privatise Sg Bagan since most of the assets will be parked there?” muses a market observer.

Diamond7

2,225 posts

Posted by Diamond7 > 1 month ago | Report Abuse

CIRCULAR TO SHAREHOLDERS IN RELATION TO THE (I) PROPOSED ACQUISITION OF SUBSTANTIALLY ALL OF THE ASSETS AND LIABILITIES OF KUCHAI DEVELOPMENT BERHAD ("KDB") FOR A TOTAL CONSIDERATION OF UP TO RM275.47 MILLION, WHICH WILL BE SATISFIED THROUGH THE ALLOTMENT AND ISSUANCE OF UP TO 27,519,500 NEW ORDINARY SHARES IN SUNGEI BAGAN RUBBER COMPANY (MALAYA) BERHAD ("SG BAGAN") ("SHARES") ("CONSIDERATION SHARES") AT AN ISSUE PRICE OF RM10.01 PER CONSIDERATION SHARE ("PROPOSED ACQUISITION"); (II) PROPOSED EXEMPTION UNDER SUBPARAGRAPH 4.08(1)(A) OF THE RULES ON TAKE-OVERS, MERGERS AND COMPULSORY ACQUISITIONS ("RULES") TO KDB AND PERSONS ACTING IN CONCERT ("PACs") WITH IT FROM THE OBLIGATION TO UNDERTAKE A MANDATORY OFFER ("MO") FOR ALL THE REMAINING SHARES NOT ALREADY HELD BY THEM UPON COMPLETION OF THE PROPOSED ACQUISITION ("PROPOSED KDB EXEMPTION"); AND (III) PROPOSED EXEMPTION UNDER SUBPARAGRAPH 4.08(1)(A) OF THE RULES TO KLUANG RUBBER COMPANY (MALAYA) BERHAD ("KRCB") AND PACs WITH IT FROM THE OBLIGATION TO UNDERTAKE A MO FOR ALL THE REMAINING SHARES NOT ALREADY HELD BY THEM UPON COMPLETION OF THE PROPOSED DISTRIBUTION BY KDB OF ALL OF THE CONSIDERATION SHARES TO THE ENTITLED SHAREHOLDERS OF KDB WHOSE NAMES APPEAR IN THE RECORD OF DEPOSITORS OF KDB ON A DATE TO BE DETERMINED LATER BY WAY OF DIVIDEND-IN-SPECIE AND CAPITAL REDUCTION AND REPAYMENT ("PROPOSED KRCB EXEMPTION")

Diamond7

2,225 posts

Posted by Diamond7 > 1 month ago | Report Abuse

CIRCULAR TO SHAREHOLDERS IN RELATION TO THE FOLLOWING: (I) PROPOSED DISPOSAL OF SUBSTANTIALLY ALL THE ASSETS AND LIABILITIES IN KUCHAI DEVELOPMENT BERHAD ("KDB") TO SUNGEI BAGAN RUBBER COMPANY (MALAYA) BERHAD ("SG BAGAN") TO BE SATISFIED ENTIRELY VIA THE ISSUANCE OF NEW ORDINARY SHARES IN SG BAGAN ("SG BAGAN SHARES") ("PROPOSED DISPOSAL"); AND (II) PROPOSED DISTRIBUTION OF SG BAGAN SHARES HELD BY KDB ARISING FROM THE PROPOSED DISPOSAL TO ITS ENTITLED SHAREHOLDERS BY WAY OF A PROPOSED CAPITAL REDUCTION AND REPAYMENT AND PROPOSED DIVIDEND-IN-SPECIE

AhPek

116 posts

Posted by AhPek > 1 month ago | Report Abuse

Is this a good deal for KDB's shareholders?

Posted by KarmaPrince > 3 weeks ago | Report Abuse

Just look at the price chart of these companies for the last 20 years then you decide whether these companies fit your investment criteria.

dompeilee

11,888 posts

Posted by dompeilee > 3 weeks ago | Report Abuse

Soon...$1.80, then $1.90...tgt is $2 at least, at which point, the return on capital is still 53%, far higher than the 29% just before the ex-date of the previous SBagan shr distribution!

dompeilee

11,888 posts

Posted by dompeilee > 3 weeks ago | Report Abuse

Prediction fulfilled!!! Another bullseye!!!🎯🎯🎯 I can now terminate another $8,595.68 of margin loans on Kuchai if I so choose!🙆✌🍾 POOR CharlesT can go fly LOSERS' kite...🎃

dompeilee

11,888 posts

Posted by dompeilee > 2 weeks ago | Report Abuse

YIPPeeeeeEEEEEE!!! Equal 2024 high( & 8 year high to boot!)!!! $2.00 by 8th May!!! Another bonus is that it looks like nobody else is here...the less participants( ie speculators), the higher it can rise!🤗

hhhiii123

726 posts

Posted by hhhiii123 > 2 weeks ago | Report Abuse

Just buy then fly lol?, seem like only sky is the limit

AhPek

116 posts

Posted by AhPek > 1 week ago | Report Abuse

How's the outcome of the EGM?

dompeilee

11,888 posts

Posted by dompeilee > 1 week ago | Report Abuse

Approved by 92.72% in favour margin.

speakup

25,307 posts

Posted by speakup > 1 week ago | Report Abuse

besok Limit Up?

hhhiii123

726 posts

Posted by hhhiii123 > 1 week ago | Report Abuse

hope so, almost no momentum lol

Posted by jusztpu2ra > 1 week ago | Report Abuse

whats the TP?

Diamond7

2,225 posts

Posted by Diamond7 > 1 week ago | Report Abuse

Up up...
Up non stop!

Diamond7

2,225 posts

Posted by Diamond7 > 1 week ago | Report Abuse

222 x SBagan

222 x RM5.70

dompeilee

11,888 posts

Posted by dompeilee > 1 week ago | Report Abuse

TRIPLE Jackpot for me! Great Eastern bought last yr Mar for S$17.52☝ Kuchai bought 64 lots since 2022 @ $1.78 avg incl margin interest✌ & SBagan bought 10 lots since 2015 @ $3.11 avg!💰💰💰

dompeilee

11,888 posts

Posted by dompeilee > 1 week ago | Report Abuse

Averaged UP @ 2.08 just now. As a point of interest, Kuchai's holdings in Great Eastern @ the takeover price alone is worth 2.13, not including the 66-68c in cash per shr once the latter's dividend is credited & disregarding all the other assets(Emerald Hill S'pore shophouse & 8 ha Semenyih land)

GS

272 posts

Posted by GS > 1 week ago | Report Abuse

anyone have the details for the following? kindly share.

from The Edge Malaysia Weekly : "Kuchai shareholders missed out on bonanza by a mere two days "

dompeilee

11,888 posts

Posted by dompeilee > 1 week ago | Report Abuse

I'm disappointed by the CAP AYAM standard of the Edge's articles(which is why I have refused to buy a single copy of their publications since 2016...crammed with dvmb ads!) The shareholders' approval was given 4 days ago BUT the deal needs to wait until 3Q '24 to be completed. There's still room for adjustments since the OCBC takeover could be completed b4 then so the 188 mil equities specified in the original deal could turn into 263.9 mil CASH which is a significant difference from the balance sheet position when the deal was entered into. Furthermore, many minority Great Eastern holders are dissatisfied that the deal is proposed @ 0.8 X the fair value of the biz, so the offer could potentially go UP ! OCBC failed to take it over in 2004 & 2006 so I doubt they won't raise the bid just to get it RIGHT this time...

Posted by lionel messi > 5 days ago | Report Abuse

How will Kuchai shareholders benefit from this deal? Will they miss out completely after the recent EGM?

dompeilee

11,888 posts

Posted by dompeilee > 5 days ago | Report Abuse

Like I said, the transfers of ownership have presumably not yet been executed as the EGM approval has to precede it & that approval was only obtained 6 days ago. The latest dividend from 3.032 million GEastern shrs will be credited to Kuchai, NOT SBagan.

star899

140 posts

Posted by star899 > 5 days ago | Report Abuse

Whether the deal could go through would not matter much.
Through the various proposals from the holding and associated companies, we can visualize how valuable and precious the assets are owned by Kuchai !!!
In other words, the share price might not have reflected its intrinsic value which only the insiders can know before the revaluations.

Posted by lionel messi > 5 days ago | Report Abuse

Thanks dompeilee and star899. Great insight. Much appreciated.

dompeilee

11,888 posts

Posted by dompeilee > 4 days ago | Report Abuse

dompeilee

Averaged UP @ 2.08 just now. As a point of interest, Kuchai's holdings in Great Eastern @ the takeover price alone is worth 2.13, not including the 66-68c in cash per shr once the latter's dividend is credited & disregarding all the other assets(Emerald Hill S'pore shophouse & 8 ha Semenyih land)
3 days ago


Took some contra profit on Kuchai @ 2.30-2.35

Diamond7

2,225 posts

Posted by Diamond7 > 11 hours ago | Report Abuse

# Dompeilee
Congrats!
You took profit at 230/235

Cooling period....

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