- 4 new shareholders (challengers) are proposing for appointment of themselves as directors in replacement of 4 existing directors representing Demi Maju. The tussle becomes interesting due to both parties have almost the same number of shares (those that are visible, Non-visible I am not able to predict). Those headed by Syed Ali has 31.19% while under Demi Maju (existing controlling shareholder) has 30.58%.
|Part of Top 30 for ending 2012. Look particularly at No 1 vs No 2 - 5|
- Who are the current management? They look like pure and genuine business people who may not have really care about share price (probably their mistake). The business is supplying aluminium foil packaging to the tobacco industry and it seems like the business has managed to turnaround since 2005 although not spectacular. The current market capitalisation for the company is RM86.57 million from a traded price of RM2.00. How did the turnaround happened? Gearing reduced and mainly due to them halting the fibre optic and cable business which was a problem to the company.
- The worry about RM8.6 million owing to parties related to the major shareholder. Well, let me show something over below and shareholders might have the chance to understand them clearer.
|Part of 2007 Balance Sheet. Notice the massive reduction in borrowings from 2006 to 2007|
My guess is that from the borrowings in 2006 which was exceeding RM21.2 million, it has reduced to slightly more than RM3 million in 2007. Other payables however increased and that was where the RM8.6 million came about to pare off the borrowings hence gearing which was a problem to the company was cleared. It looks like genuine. Read the director's statement in 2007 as below. If its really happening, I guess we cannot fault the related party owing. This interest free payable looks like an honestly good thing for the shareholders.
|Part of 2007 Chairman's statement|
|Sundry payables which the shareholders are concerned about. Happened in FY2007 and still existing until today|
- Who are representing the challengers team? Syed Ali Al-Habshee (as below). It may be true they may not have the relevant prior experience in the aluminium packaging business as claimed by the current directors. You might to check out the background yourself via googling. In terms of these kind of exercise though i.e. company raiding, I think the challengers are perhaps way more experience than the current team of directors based on background. But do you want pure corporate people to head this company?
The question is if the company is for the long term, you may want to ask where do the new board members (if appointed) stand.
The four challengers probably have gone in at price between RM1 - RM1.75 with I think their average purchase price around RM1.20 based on below chart. If that is the price, they went in, the team may have made some genuinely decent investment (for long term though which may not be the case) based on the declaration of the company's directors committing to pay all profits as dividends.
- How strong is the company? Decent, with a specialised focus in providing solutions to the tobacco industry. The company obviously has a clean balance sheet after cleaning them off in 2007. However, it is not amazingly interesting for me though the business it is in and at current price. Whether the current price is justifiable for you? It depends. But just some information as below.
- How the h*** did the company change its auditor from Ernst and Young to a small outfit. You will have to ask the current directors.
Note: I am not being paid by any party for this...