KUALA LUMPUR: DBE Gurney Resources Bhd is currently in discussion with a shareholder of CI Holdings on placement of new shares to raise fresh working capital.
In a reply to Bursa Malaysia’s query on unusual market activity, DBE Gurney said the company has plans to undertake a private placement and the talks with a CI Holdings shareholder was at ‘preliminary stage’ now.
When contacted, DBE Gurney’s managing director Alex Ding declined to reveal much on the private placement as the company has yet to iron out the details. He said that DBE Gurney would make an announcement when the time is right.
Datuk Johari Abdul Ghani, who sold Permanis Sdn Bhd to Japan’s Asahi Group Holdings Ltd for RM820 million cash last year, is the single largest shareholder of CI Holdings.
Johari, the managing director of CI Holdings, holds a 30.53% stake in the company. According to him, the company is on the prowl for new businesses after divesting its entire equity interest in Permanis. This sparked speculation that CI Holdings may be keen on poultry breeder DBE Gurney.
A Nanyang Siang Pau report, which quoted sources, yesterday said that CI Holdings would pay RM40.4 million, which was equivalent to 20 sen per share, to acquire a 30% equity stake in DBE Gurney.
The poultry stock surged 23% or 2.5 sen to nine-month high of 13.5 sen. The hardly traded counter saw some 315 million shares changing hands yesterday, making it the most actively traded stock on Bursa Malaysia. The trading volume was almost half the company’s issued share capital. DBE Gurney’s performance has been less than stellar although its peers in the industry have been experiencing improving fortunes. DBE Gurney has been loss-making since FY06 ended Dec 31.
Price controls have been relaxed to five weeks a year during festive periods, allowing producers to command better prices. On top of that, the recent floods in Thailand have disrupted supply and bolstered prices. These augur well for poultry farmers.
The company incurred a net loss of RM202,000 for FY10 compared with RM3.17 million the year before. Revenue was higher at RM137.8 million against RM113.5 million previously.
For 9MFY11 ended Sept 30, it achieved a net profit of RM1.2 million compared with RM4.09 million in the previous corresponding period. Interestingly, despite the over RM4 million net profit for 9MFY10, the company actually ended the year in the red.
DBE Gurney’s cash reserves have diminished despite it undertaking a rights issue that raised RM61 million fresh capital. As at Sept 30 last year, the company’s cash balance was RM3.26 million compared with RM17.6 million at end-March, 2011.
The rights issue was undersubscribed, but it was underwritten by OSK Investment Bank Bhd, which picked up 180.99 million shares for an estimated RM18.1 million. The investment bank has since disposed of all its shares in DBE Gurney.
This article appeared in The Edge Financial Daily, January 20, 2012.
In a reply to Bursa Malaysia’s query on unusual market activity, DBE Gurney said the company has plans to undertake a private placement and the talks with a CI Holdings shareholder was at ‘preliminary stage’ now.
When contacted, DBE Gurney’s managing director Alex Ding declined to reveal much on the private placement as the company has yet to iron out the details. He said that DBE Gurney would make an announcement when the time is right.
Datuk Johari Abdul Ghani, who sold Permanis Sdn Bhd to Japan’s Asahi Group Holdings Ltd for RM820 million cash last year, is the single largest shareholder of CI Holdings.
Johari, the managing director of CI Holdings, holds a 30.53% stake in the company. According to him, the company is on the prowl for new businesses after divesting its entire equity interest in Permanis. This sparked speculation that CI Holdings may be keen on poultry breeder DBE Gurney.
A Nanyang Siang Pau report, which quoted sources, yesterday said that CI Holdings would pay RM40.4 million, which was equivalent to 20 sen per share, to acquire a 30% equity stake in DBE Gurney.
The poultry stock surged 23% or 2.5 sen to nine-month high of 13.5 sen. The hardly traded counter saw some 315 million shares changing hands yesterday, making it the most actively traded stock on Bursa Malaysia. The trading volume was almost half the company’s issued share capital. DBE Gurney’s performance has been less than stellar although its peers in the industry have been experiencing improving fortunes. DBE Gurney has been loss-making since FY06 ended Dec 31.
Price controls have been relaxed to five weeks a year during festive periods, allowing producers to command better prices. On top of that, the recent floods in Thailand have disrupted supply and bolstered prices. These augur well for poultry farmers.
The company incurred a net loss of RM202,000 for FY10 compared with RM3.17 million the year before. Revenue was higher at RM137.8 million against RM113.5 million previously.
For 9MFY11 ended Sept 30, it achieved a net profit of RM1.2 million compared with RM4.09 million in the previous corresponding period. Interestingly, despite the over RM4 million net profit for 9MFY10, the company actually ended the year in the red.
DBE Gurney’s cash reserves have diminished despite it undertaking a rights issue that raised RM61 million fresh capital. As at Sept 30 last year, the company’s cash balance was RM3.26 million compared with RM17.6 million at end-March, 2011.
The rights issue was undersubscribed, but it was underwritten by OSK Investment Bank Bhd, which picked up 180.99 million shares for an estimated RM18.1 million. The investment bank has since disposed of all its shares in DBE Gurney.
This article appeared in The Edge Financial Daily, January 20, 2012.
