PETALING JAYA: Harvest Court Bhd is close to acquiring a new business which involves converting agricultural waste into paper, industry sources say.
The asset being injected into Harvest is believed to be a company called 1Green Enviro Sdn Bhd, which is linked to its substantial shareholder Datuk Raymond Chan, according to sources.
A filing with the Companies Commission of Malaysia shows that 1Green Enviro was established on Nov 12, 2010 of which Paramount Billion Sdn Bhd owns 93%. Paramount may be a vehicle of Chan, who directly owns only one share in 1Green Enviro, although this is not confirmed.
Chan also sits on 1Green Enviro’s board together with Mohd Nazifuddin Najib, the son of Prime Minister Datuk Seri Najib Razak.
1Green Enviro is in the business of converting raw, empty palm oil fruit bunches into paper, which it claims is much cheaper than using pulp and corrugated cartons.
The valuation of 1Green Enviro that will be injected into Harvest is not known. Harvest’s current core business is processing sawn timber and making timber doors.
Should the proposed acquisition of 1Green Enviro materialise, it would be a much different scenario from earlier speculation that Chan was mulling over injecting Sagajuta (Sabah) Sdn Bhd, the developer of 1Borneo mall in Kota Kinabalu, into Harvest.
Sagajuta has several ongoing projects including 1Sulaman and 1Likas in Kota Kinabalu, and 1Gateway in Klang.
Interstingly, Nazifuddin is also the chairman of Sagajuta.
Chan bought a 13.83% stake in Harvest shortly after the abortion, after due diligence, of a proposal to inject Sagajuta into Jerneh Asia Bhd, which was then looking for a core business.
Industry observers note that a speculation over asset injection into Harvest has helped fuel the rally of the company’s share price, apart from the emergence of a prominent figure, Nazifuddin, on the board as non-executive director.
Little-known Harvest is now a star performer on Bursa Malaysia. While many stocks are still regaining their lost ground after the heavy selldown in September, Harvest’s share price has leaped over 10 times in less than a month to 87.5 sen last Friday from 8.5 sen on Oct 13. Year-to-date, the counter has jumped 573% to its six-year high of 87.5 sen.
In terms of financials, Harvest slipped into the red for FY10 ended Dec 31, posting a net loss of RM2.81 million or loss per share of 1.68 sen, compared to a net profit of RM12.16 million or earnings per share of 31.45 sen.
Revenue fell sharply to RM6.42 million from RM9.23 million the year before.
Harvest attributed the poor financial performance to lower sales volume due to the upgrading of machinery, inefficiency of new workers and new designs.
The company manufactures timber products and exports them to India and the Middle East.
For 1HFY11 ended June 30, Harvest’s net loss narrowed to RM678,000 from RM1.35 million in the previous corresponding period.
Judging by the share price performance, the asset injection seems to be expected to give a big boost to the company’s earnings. 1Green Enviro has yet to set its earnings track record as it is only a year old.
It will be interesting to see how the asset injection will help to boost the company’s earnings and justify the sharp spike of Harvest’s share price. Harvest was queried by Bursa Malaysia on the movement of its share price last Friday, the second query to the company from the exchange since Oct 17.
In its reply to the first query, Harvest pointed out that the company’s managing director Ng Swee Kiat’s stake would rise to 35.05% from 16.78%, triggering a takeover offer for all the shares in Harvest if he is able to buy the 18.3% stake held by Affin Bank Bhd.
Ng sold part of his stake to avoid a mandatory general offer before he submitted a proposed put option agreement to Affin to acquire the bank’s 18.3% stake in Harvest at 20 sen per share.
The offer price was later revised to 25 sen per share. It is not known if Affin Bank has had sold its shares to Ng. To the latest query by Bursa last Friday, Harvest responded that it was unaware of any developments that might have contributed to the unusual market activity.
The queries did not stop Harvest shares from rising further.
Although there were no changes in shareholding filed at press time, sources said Nazifuddin might have purchased between two and three million shares or up to 1.7% of Harvest during early trade last Friday.
Both Nazifuddin and Chan joined Harvest’s board on Oct 28. Chan acquired 23.808 million shares, a 13.85% stake, at 20 sen per share.
The value of Chan’s stake in Harvest has more than tripled since mid-October, with the stock closing at 87.5 sen last Friday.
This article appeared in The Edge Financial Daily, November 8, 2011.
The asset being injected into Harvest is believed to be a company called 1Green Enviro Sdn Bhd, which is linked to its substantial shareholder Datuk Raymond Chan, according to sources.
A filing with the Companies Commission of Malaysia shows that 1Green Enviro was established on Nov 12, 2010 of which Paramount Billion Sdn Bhd owns 93%. Paramount may be a vehicle of Chan, who directly owns only one share in 1Green Enviro, although this is not confirmed.
Chan also sits on 1Green Enviro’s board together with Mohd Nazifuddin Najib, the son of Prime Minister Datuk Seri Najib Razak.
1Green Enviro is in the business of converting raw, empty palm oil fruit bunches into paper, which it claims is much cheaper than using pulp and corrugated cartons.
The valuation of 1Green Enviro that will be injected into Harvest is not known. Harvest’s current core business is processing sawn timber and making timber doors.
Should the proposed acquisition of 1Green Enviro materialise, it would be a much different scenario from earlier speculation that Chan was mulling over injecting Sagajuta (Sabah) Sdn Bhd, the developer of 1Borneo mall in Kota Kinabalu, into Harvest.
Sagajuta has several ongoing projects including 1Sulaman and 1Likas in Kota Kinabalu, and 1Gateway in Klang.
Interstingly, Nazifuddin is also the chairman of Sagajuta.
Chan bought a 13.83% stake in Harvest shortly after the abortion, after due diligence, of a proposal to inject Sagajuta into Jerneh Asia Bhd, which was then looking for a core business.
Industry observers note that a speculation over asset injection into Harvest has helped fuel the rally of the company’s share price, apart from the emergence of a prominent figure, Nazifuddin, on the board as non-executive director.
Little-known Harvest is now a star performer on Bursa Malaysia. While many stocks are still regaining their lost ground after the heavy selldown in September, Harvest’s share price has leaped over 10 times in less than a month to 87.5 sen last Friday from 8.5 sen on Oct 13. Year-to-date, the counter has jumped 573% to its six-year high of 87.5 sen.
In terms of financials, Harvest slipped into the red for FY10 ended Dec 31, posting a net loss of RM2.81 million or loss per share of 1.68 sen, compared to a net profit of RM12.16 million or earnings per share of 31.45 sen.
Revenue fell sharply to RM6.42 million from RM9.23 million the year before.
Harvest attributed the poor financial performance to lower sales volume due to the upgrading of machinery, inefficiency of new workers and new designs.
The company manufactures timber products and exports them to India and the Middle East.
For 1HFY11 ended June 30, Harvest’s net loss narrowed to RM678,000 from RM1.35 million in the previous corresponding period.
Judging by the share price performance, the asset injection seems to be expected to give a big boost to the company’s earnings. 1Green Enviro has yet to set its earnings track record as it is only a year old.
It will be interesting to see how the asset injection will help to boost the company’s earnings and justify the sharp spike of Harvest’s share price. Harvest was queried by Bursa Malaysia on the movement of its share price last Friday, the second query to the company from the exchange since Oct 17.
In its reply to the first query, Harvest pointed out that the company’s managing director Ng Swee Kiat’s stake would rise to 35.05% from 16.78%, triggering a takeover offer for all the shares in Harvest if he is able to buy the 18.3% stake held by Affin Bank Bhd.
Ng sold part of his stake to avoid a mandatory general offer before he submitted a proposed put option agreement to Affin to acquire the bank’s 18.3% stake in Harvest at 20 sen per share.
The offer price was later revised to 25 sen per share. It is not known if Affin Bank has had sold its shares to Ng. To the latest query by Bursa last Friday, Harvest responded that it was unaware of any developments that might have contributed to the unusual market activity.
The queries did not stop Harvest shares from rising further.
Although there were no changes in shareholding filed at press time, sources said Nazifuddin might have purchased between two and three million shares or up to 1.7% of Harvest during early trade last Friday.
Both Nazifuddin and Chan joined Harvest’s board on Oct 28. Chan acquired 23.808 million shares, a 13.85% stake, at 20 sen per share.
The value of Chan’s stake in Harvest has more than tripled since mid-October, with the stock closing at 87.5 sen last Friday.
This article appeared in The Edge Financial Daily, November 8, 2011.
