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Ayala Land MGO is unlikely, says MCT

Lim Kok BoonSHAH ALAM (Dec 21): MCT Bhd has dismissed the concerns of certain factions about a possible mandatory takeover by its single largest shareholder Ayala Land Inc after the latter raised its stake in the company to 32.95% in October.

Ayala Land had on Oct 16 hiked its stake in MCT to 32.95% from 9.16% previously for US$92 million (RM396 million).

Ayala Land's shareholding is just 0.05% below the 33% threshold of a mandatory general offer (MGO).

Today, MCT executive director Datuk Lim Kok Boon (pictured) discounted the possibility and does not think Ayala Land will trigger a MGO.

"No, no, they have a very clear understanding of the shareholding dynamics," said Lim.

"Interestingly, Ayala Land, MCT chairman Tan Sri Barry Goh Ming Choon [and] chief executive officer Datuk Seri Tong Seech Wi do not see shareholding as how to run a business.

"They focus more on the management than shareholding and look at the totality instead of individual shareholder," he added.

Lim pointed out Ayala Land may not be able to maintain the 25% of public shareholding spread under the listing rules should it further raise its stakeholding.

"Meaning to say that, Ayala Land may not be able to maintain MCT as a listed vehicle," he added.

Lim explained that the dynamics of the shareholding between Goh, Tong and Ayala Land is that should one of them raise their stake, the other parties' shareholding will fall or vice versa.

Ayala Land, Goh and Tong collectively control over 60% of the total shareholding in MCT.

Meanwhile, MCT remained bullish on its outlook while acknowledging the sluggish property sector outlook.

Commenting on this, Tong said the group's performance will be underpinned by the RM2 billion unbilled sales, which can support its earning for two to three years.

"We believed our sustainable operating module, which is doing everything in-house, will also help us to improve our earnings visibility," he added.

Currently, Tong said the group has a total land bank of 500 acres, which will be developed in the next 10 years.

"We will continue to launch new projects according to plan and will not hold back," he stressed.

MCT is also the operator of One City Sky Park mall and The Place located within the One City at USJ 25, Subang Jaya.

Lim said the group plans to transform its current retail space into a thematic mall.

"We are in the midst of transformation and are getting new tenants to move in," he said.

"After one year of operation, we found the previous concept did not bode well with the market. Hence we are trying to revamp it," he added.

For FY15, MCT recorded a net profit of RM63.6 million and a revenue of RM619.7 million.

In the first financial quarter ended Sept 30, 2015 (1QFY16), MCT's net profit fell to RM15.46 million from RM16.86 million a year ago due to shrinking profit margin attributable to the higher tax provision arising from certain companies registering losses that could not be offset against the taxable profit.

Revenue for the quarter grew 62.8% to RM185.5 million from RM113.9 million in 1QFY15.

Shares in MCT were up one sen or 0.78% to trade at RM1.29, for a market capitalisation of RM1.72 billion. -- theedgemarkets.com

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