KUALA LUMPUR (March 22): KOBAY TECHNOLOGY [] BHD [] is acquiring full control of its 53.16% subsidiary LIPO CORPORATION BHD [] via a selective capital reduction and repayment exercise.
Under the corporate exercise announced on Thursday, Kobay requested Lipo to reduce the paid-up by cancelling one share for every RM1 paid by Lipo to shareholders as capital repayment.
“All entitled shareholders will receive a cash payment amounting to RM1.25 per Lipo share pursuant to the proposed SCR,” it said.
Lipo said based on the maximum scenario, entitled shareholders holding 23.94 million shares would receive RM29.93 million cash under the SCR.
“Should there be a shortfall of internally generated funds from Lipo to meet the total capital repayment, Kobay will undertake to address this shortfall by advancing cash to Lipo. Kobay will waive its entitlements to the proposed SCR,” it said.
Upon completion of the proposed SCR, Lipo’s issued and paid-up share capital would be RM20.78 million comprising of 20,782,750 Lipo shares, all of which will be held by Kobay.
Kobay’s rationale was to integrate the management teams and operations of Lipo and its group of companies to achieve synergies from improved economies of scale arising from stronger buying positions with suppliers and more efficient resource allocation.
It also said the one-year volume weighted average price (VWAP) of Lipo as at March 19, 2012 was 96.9 sen, which was below the audited net asset of the Lipo Group as at June 30, 2011.
“The one-year VWAP of Lipo shares of 96.9 sen do not appear to reflect and commensurate with the fundamentals of the Lipo Group.,” it said, adding the proposed SCR would enable the shareholders to realise their investment in Lipo in an efficient and expeditious manner.
Lipo said the board on Thursday deliberated on the SCR offer letter and decided to present the proposal to Lipo’s shareholders for their consideration.
Under the corporate exercise announced on Thursday, Kobay requested Lipo to reduce the paid-up by cancelling one share for every RM1 paid by Lipo to shareholders as capital repayment.
“All entitled shareholders will receive a cash payment amounting to RM1.25 per Lipo share pursuant to the proposed SCR,” it said.
Lipo said based on the maximum scenario, entitled shareholders holding 23.94 million shares would receive RM29.93 million cash under the SCR.
“Should there be a shortfall of internally generated funds from Lipo to meet the total capital repayment, Kobay will undertake to address this shortfall by advancing cash to Lipo. Kobay will waive its entitlements to the proposed SCR,” it said.
Upon completion of the proposed SCR, Lipo’s issued and paid-up share capital would be RM20.78 million comprising of 20,782,750 Lipo shares, all of which will be held by Kobay.
Kobay’s rationale was to integrate the management teams and operations of Lipo and its group of companies to achieve synergies from improved economies of scale arising from stronger buying positions with suppliers and more efficient resource allocation.
It also said the one-year volume weighted average price (VWAP) of Lipo as at March 19, 2012 was 96.9 sen, which was below the audited net asset of the Lipo Group as at June 30, 2011.
“The one-year VWAP of Lipo shares of 96.9 sen do not appear to reflect and commensurate with the fundamentals of the Lipo Group.,” it said, adding the proposed SCR would enable the shareholders to realise their investment in Lipo in an efficient and expeditious manner.
Lipo said the board on Thursday deliberated on the SCR offer letter and decided to present the proposal to Lipo’s shareholders for their consideration.
