Monday, 12 March 2012

Abdul Talib Mohamed, son in reverse takeover of PFCE

KUALA LUMPUR (March 12): The group executive chairman of PFC Engineering Sdn Bhd Datuk Abu Talib Mohamed and his son, Muammar Gadaffi are undertaking a reverse takeover of the loss-making PFCE Bhd, which is currently involved in the ceramics business.

PFCE said on Monday the corporate exercise would see Abu Talib and his son, who own 100% stake in PFC Engineering injecting the company into PFCE. Currently, they also own a combined 40% stake in PFCE or 35.16 million shares.

Under the corporate exercise, they will transfer their stake in PFC Engineering to a new company, DAT Sdn Bhd.

In conjunction with the proposed transfer, PFC Engineering will distribute its investment in PFCE -- comprising 35.16 million PFCE shares via dividend-in-specie to DAT for RM15.8 million. PFC Engineering will declare up to RM24 million cash dividend to DAT.

DAT, the ultimate shareholders and parties acting in concert with them proposed to seek an exemption to extend a mandatory general offer for all the remaining PFCE Shares not already held by them.

The exercise would then see PFCE acquiring the entire interest in PFC Engineering from DAT for RM300 million which would be satisfied by the issuance of 500 million new PFCE shares at 60 sen per share.

DAT would also place out up 90 million PFCE shares and proposed restricted offer for sale of up to 52.838 million PFCE shares at an issue/offer price to be determined later.

PFCE said the rationale for the corporate exercise was that the PFCE group was currently involved in the ceramic business, which had been losing money for the past seven financial years ended Dec 31, 2011.

“The proposed acquisition will allow PFCE to diversify its business into the oil and gas industry which would provide another source of revenue and income to PFCE and reduce its sole dependency on the existing core business of trading and manufacturing of pottery, porcelain and ceramic ware products.

“The expansion of PFCE’s business into the oil and gas industry is part of PFCE’s long term strategy of diversifying into other industries with strong growth prospects instead of depending solely on its existing core business,” it said.

As for the PFC Engineering group of companies, they had completed over RM1.2 billion worth of projects over the past three (3) years and was expected to enhance the earnings of PFCE subsequent to the completion of the proposed acquisition.

The acquisition of PFC Engineering is expected to reverse the loss after tax after minority interest of PFCE of RM1.3 million for FYE Dec 31, 2011 to a healthy profit after tax and minority interests of RM29.1 million upon completion of the proposed acquisition, premised on a full year of PFC Engineering’s earnings for FYE 2011, based on PFC Engineering’s unaudited consolidated financial results.

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