KUALA LUMPUR: GW Plastics Holdings Bhd, which is in the midst of a reverse takeover (RTO) by property developer MCT Consortium Bhd (MCTCB) for RM1.21 billion, said it does not expect the property market slowdown to have a material impact on its earnings post-reverse merger.
“If you look at the projects that MCTCB has done so far, every time it launches a project, it tends to be quite well-priced,” its chief executive officer Lim Kok Boon told reporters after the company’s annual general meeting yesterday.
“MCTCB is quite well-placed to cushion it.”
MCTCB’s projects include Sky [email protected] with remaining profits of RM138 million, [email protected] with expected development profits of RM230 million and other projects with remaining profits of RM23.75 million.
GW Plastics had in January this year signed a share sale agreement with MCTCB for the proposed acquisition of MCTCB, which is also part of its plan to regularise its financial position following the disposal of its core assets to Scientex Bhd for RM283.2 million in 2012.
As the proposed acquisition would lead to a significant change in the business direction of GW Plastics, the company was required to submit its regularisation plan to the Securities Commission Malaysia (SC) for approval within 12 months.
However, the corporate deal has hit a snag, with the application seeking the SC’s approval being returned on Tuesday as certain information or documents in relation to the vendors/enlarged MCT Group remain outstanding.
“Some of the information has to be not more than six months from the last audited accounts,” said Lim.
However, Lim could not give a specific date for the completion of the proposed acquisition. GW Plastics had initially stated that the deal would be completed by the end of this year.
The proposed acquisition sees the issuance of 1.08 billion new GW Plastics shares as well as RM135.16 million worth of 30-month zero coupon irredeemable convertible unsecured loan stocks.
This article first appeared in The Edge Financial Daily, on June 19, 2014.
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